Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

HARROGATE BOROUGH COUNCIL BILL [Lords]

Read the Third time, and passed, with amendments.

BLYTH HARBOUR BILL [Lords] (By Order)

Order for Second Reading read.

To be read a Second time tomorrow.

Oral Answers to Questions — SCOTLAND

The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart): Representations have been received from each of the new town development corporations and from the forum of Scottish local authorities with new towns.

Mr. Lambie: I thank the Minister for his reply and for recognising the need for consultation with the new town development corporations. Is he aware that for the first time in the history of the Scottish new towns we are experiencing a serious housing shortage as second generation families start to apply for new rented houses? Will the Minister consider giving special consideration to Irvine new town? It was the last of the new towns and has an ever-increasing housing list. Will he give the development corporation the permission and the resources to start building immediately new houses for these second generation families?

Mr. Stewart: I have asked the development corporations, including the one for Irvine, to provide detailed information which will enable me to make a thorough assessment of housing needs in the Scottish new towns. Irvine has £2·3 million gross to spend on housing in the current year. It is fair to say that home ownership in Irving, at 25 per cent., is low.

Mr. Willie W. Hamilton: Is the Minister aware that 80 per cent. of the cases that come to my surgery in Glenrothes relate to housing problems? Flats for single persons have been empty for months in Glenrothes yet

large numbers of single people are homeless and cannot occupy those flats because the Government insist that they must be sold, even though they were built to be rented. Is he prepared to have another look at the senseless housing policies inflicted on the people of Glenrothes and elsewhere by the Government?

Mr. Stewart: The Government's housing policies are based on a proper and balanced mix of housing. I reject the hon. Member's general allegation. I reassure him about Glenrothes, because I shall consider carefully the detailed case made recently by the development corporation on housing matters.

Mr. Norman Hogg: Does the Minister not understand that the current policy of sales linked to a lack of new building is producing an imbalance in the provision of housing which gives young married couples no hope? Will he agree to meet the development corporations and the district councils that have new towns to discuss this as a matter of urgency so that we can get the construction of houses under way as quickly as possible?

Mr. Stewart: The construction of special needs housing is going ahead in the new towns, which have been building at a rate of 130 specially adapted and amenity units per annum. Of course I shall consider the representations from Cumbernauld, and after I have had an opportunity to assess the evidence recently put to me I shall he able to undertake consultations and the meeting with the local authorities that has been requested.

Mr. Hugh Brown: May I widen this debate, because we are in danger of dealing with the matter as if it were a problem only of new town development corporations? The Minister has said that he will consult chairmen in assessing the need. Will he also take into account the need to have discussions with his colleague the Secretary of State, who does not have a housing policy for Scotland? Many constituents in local authority housing will never get to a new town, either because they are on benefit or because they have small incomes.

Mr. Stewart: My right hon. and learned Friend has an excellent housing policy for Scotland, and we have been discussing new towns because the question is about new towns. Obviously I have been in correspondence with the hon. Gentleman about dependent relatives, and the needs of that particular group will be taken into account in the current review.

New Towns (Housing)

Mr. Lambie: asked the Secretary of State for Scotland what representations he has received on the case for more general needs housing in the new towns of Scotland.

Oral Answers to Questions — Rating Reform

Mr. Hirst: asked the Secretary of State for Scotland what representations he has received on the Government's proposals for rating reform; and if he will make a statement.

The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): Over 300 representations have now been received from individuals and a wide range of organisations.

Mr. Hirst: Does my hon. Friend agree that there has been a broad welcome from the business community, which sees the reforms as helping to redress the appalling imbalance in business rates north and south of the border? Is he aware that the business community also warmly welcomes the protection which will be given to it during the transitional period of rating reform? Will he contrast


the worth of the Government's proposals with the fact that the Labour party will do nothing to reform the rates, and with the rather loopy idea which is circulating in alliance circles that rates should somehow be linked to the profits of a business?

Mr. Ancram: I am pleased to confirm that we have had a broad welcome for our proposals on non-domestic rates from a wide sector of commerce and industry. In particular, they have welcomed the proposal that, following the legislation which we intend to introduce in the next Session, non-domestic rates will be controlled within the rate of inflation by my right hon. and learned Friend. This will enable them in their cost projections to take account of the rate settlement, and will give them a stability which has not been possible in the past.

Mr. Wallace: As I understand the Government's proposals, students attending Scottish colleges and universities will be liable to a community charge at their place of residence. Do the Scottish Office, the Scottish Education Department and, indeed, English local authorities which have students attending Scottish universities and colleges intend to make appropriate provision in the university grant to meet the community charge which may be levelled?

Mr. Ancram: As the hon. Gentleman knows, at present the Green Paper is out for consultation, and obviously no firm decisions will be taken on its details until after that consultation period is completed.

Mr. Douglas: The smack of firm government.

Mr. Ancram: The hon. Member for Dunfermline, West (Mr. Douglas) talks about the smack of firm government, but he would be the first to criticise us if we were to take firm decisions before we had finished the proper consultations that we are at present carrying out. Obviously my right hon. and learned Friend will carefully consider the position of students in Scotland who become liable to pay the community charge and will do so against the background of progress with the comprehensive review of all aspects of financial support for students which was announced on 18 June.

Mr. Henderson: Is my hon. Friend aware that there will be a warm welcome, especially among less well-off ratepayers, for his reiteration of the Government's commitment to introduce legislation next Session? Does he agree that students are already paying substantially for local government in that through the rents for their residences they are paying rates?

Mr. Ancram: I can confirm my hon. Friend's last point. As students benefit from local government services I am sure that most of them would accept the fairness of making a contribution towards them, together with every other adult in the Scottish community. These proposals have been warmly welcomed by those who, in the past, have suffered under the inequitable and wholly discredited rating system which at present operates and which appears still to be Labour party policy.

Mr. Dewar: With so many important points still subject to consultation, will the Minister give an undertaking that before legislation is introduced he will produce a firm account of how the scheme will work, so that we know exactly what the implications will be? Why does the Secretary of State insist on pressing ahead with a scheme

against all the advice from the very bodies whose advice he sought specifically on its practicality? Is it not true that COSLA has described the poll tax as sheer folly? If, in the Minister's view, it is a suspect organisation, will he dwell on the fact that the Society of Local Authority Chief Executives, which is in a position to know, has urged a final rethink because it believes that the scheme is unworkable? Surely the Secretary of State should retreat from forcing this measure through and consider whether it would not be wiser to desist from introducing a tax which is not related to the ability to pay and which will inevitably result in individual injustices for very many people in Scotland.

Mr. Ancram: Once again the hon. Gentleman has failed to come forward with any alternative to the existing rating system. From what he has said today and on previous occasions, I think we can take it that he stands by the present rating system and that he will be prepared to land on the domestic ratepayers of Scotland further revaluations of the sort that we saw last year. I hope that the domestic ratepayers of Scotland are aware of that.
The hon. Member asked about the ability to discuss this in detail. I assure him that before this becomes law there will be plenty of occasions to discuss the full details. He also mentioned two bodies which he said were against these proposals, the first of which was COSLA. As I have said before, it would be a great surprise if COSLA were to recommend getting rid of a system that suits high-spending Labour authorities in Scotland, to the disadvantage of their ratepayers. As for SOLACE, my understanding of its criticisms is that it says that the present rating system is simple, straightforward and easy to manage. The same argument could have been made about a window tax in the past, but that would have been no justification for keeping it.

Oral Answers to Questions — Rural Development Fund

Sir Hector Monro: asked the Secretary of State for Scotland if he will reconsider his decision not to establish a rural development fund outwith the Highlands and Islands Board Development area.

The Secretary of State for Scotland (Mr. Malcolm Rifkind): I am not convinced that such a fund is necessary, bearing in mind the very extensive measures of assistance already available to rural areas.

Sir Hector Monro: Bearing in mind the urgency of revitalising the rural economy, does my right hon. and learned Friend agree that the SDA has insufficient funds and that the Select Committee reported unanimously in favour of a rural development fund? Will he give a very high priority to providing more jobs in the rural areas of Scotland?

Mr. Rifkind: If it were to be established, the rural fund would simply utilise existing funds that go to the rural areas from other sources of public expenditure. This year the total sum spent in the rural areas of Scotland on agriculture, fishing, forestry and related matters will be £316 million. That indicates a very high level of investment to ensure the viability of the rural areas, to which the Government attach very great importance.

Mr. Ron Brown: Does the Secretary of State accept that a rural fund may be necessary for the Lothian region—which is largely a rural area—bearing in mind the


decision rushed through by his Tory councillor colleagues who insisted that the Edinburgh relief road should be built and that its cancellation would cost a tremendous amount in compensation from the public purse to contractors? Will he think about that deeply and, indeed, agree—surely he must—that his collegues who were responsible for the decisions to build it should be surcharged were for their reckless behaviour, knowing full well that what they did immediately before a local election would be overturned afterwards, and rightly so?

Mr. Rifkind: I am not certain under which aspect of a rural fund the road would be considered eligible, but it was the hon. Gentleman's party colleagues on Lothian regional council who decided to destroy the prospect of a substantial number of jobs in Lothian region by cancelling that project.

Mr. Pollock: Will my right hon. and learned Friend confirm that the existing levels of aid to the rural areas are already substantial, even without a rural development fund? He mentioned the figure of £330 million or thereabouts. Will he confirm that on average that works out at a sum from central Government of about £15,000 a year assistance to every full-time partner in a Scottish farming enterprise?

Mr. Rifkind: My hon. Friend is absolutely correct to say that under the existing proposals there are many ways in which the rural areas of Scotland benefit substantially. More than 25 per cent. of the SDA's funds go to the rural areas of Scotland, as do similar resources from other organisations. The figures that I mentioned do not take into account rate support grant or other provisions relating to the local authorities.

Mr. Home Robertson: It seems that the 12 Tory Members from the rural south and east of Scotland cannot get even a bag of sweeties out of the Government. Is the Secretary of State aware that the Labour party accepts the need for new initiatives to deal with the special problems of rural communities throughout Scotland, and that it intends to take action to divert resources from the discredited common agricultural policy to achieve an effective programme of support for all of Scotland's rural areas?

Mr. Rifkind: That is a proud statement. We must presumably add it to the many billions of pounds of additional expenditure to which the Labour party is happily committing itself in every area of public concern. It is easy for an Opposition who know that they will never be in government to make such promises.

Mr. Kirkwood: Does the Secretary of State accept that there are legitimate legal constraints on what the SDA can do? I support what was said by the hon. Member for Dumfries (Sir H. Monro), because the Borders and Dumfries areas are having trouble providing the infrastructure necessary in the form of roads to exploit their forestry. If the SDA had some money it could do that, but it has no access to European funds.

Mr. Rifkind: As for the provision of roads relating to forestry requirements, I remind the hon. Gentleman that when Borders regional council or other local authorities seek capital allocations for road works, they could draw to the attention of the Scottish Development Department the needs of their local forestry industry. That would be

a relevant factor to draw to the attention of the Scottish Office, and it could be taken into account when capital allocations were determined.

Oral Answers to Questions — Housing Improvement Grants

Mr. Fletcher: asked the Secretary of State for Scotland if he is satisfied with the progress being made to eliminate the backlog of housing improvement grants built up since October 1983; and when he expects this to be completed.

Mr. Ancram: I am not satisfied and I am particularly concerned that, in Edinburgh, unless the council changes its priorities, it may take several years to clear the backlog.

Mr. Fletcher: Is my hon. Friend aware that the delay in eliminating this backlog is causing great distress and disappointment to many of my constituents, who have waited years to discover when their grants will be awarded and when the work will be completed? They are fed up with hearing the district council blaming the Government for that state of affairs. When will all the outstanding grants be settled, assuming that my hon. Friend can persuade the district council to give the matter top priority?

Mr. Ancram: I share my hon. Friend's anxiety. When I met representatives of Edinburgh district council on 9 June, it was a matter of some disappointment to me that when I asked it to state its priorities within the non-HRA block it could not do that. It seemed to be confused about those priorities. That will have an effect on the length of time needed to settle the backlog. The Government have recognised the size of the problem. This year we have increased the non-HRA block by 26 per cent. over the March 1985 figures. We shall examine closely the representations made to us when considering future allocations.

Mrs. McCurley: Has my hon. Friend any plans for reintroducing the level of housing improvement grant which existed before the cut-off period, which gave much encouragement to home improvement and especially encouraged the construction industry and employment in Scotland?

Mr. Ancram: We welcome the amount of work that was done as a result of the Government's two-year programme in which those boosted grants were available. The results are clearly evident in some of the most deprived areas of Scotland, and they must be welcomed. But the Government recognise that under the previous scheme there was a failure of targeting. The money was not necessarily going to those who most needed it. That is why we issued a consultation paper, and we are considering the representations made to us as a result.

Mr. Maxton: Is the Minister aware that the thousands of people in Glasgow who are waiting for housing improvement grants will be astonished to hear that he is blaming local authorities for failing to provide them? The Government's failure to provide sufficient funds to remove the backlog is the problem. Is he further aware that there is widespread opposition to his consultative paper? Will he make it clear, as his colleagues in the Department of the Environment have made it clear, that he has no intention of introducing such a silly scheme?

Mr. Ancram: We shall respond to the results of the consultations in due course, and I shall not pre-empt the


statements that we shall make on it. In the current year, Glasgow, which has 11 per cent. of the private housing stock in Scotland, receives 33·5 per cent. of the total non-HRA block. I do not understand how the hon. Gentleman can claim that Glasgow is underfunded. I remind the hon. Gentleman, who makes so much of this, that during the lifetime of the Labour Government only £55 million was provided for repair grants, as against £550 million by this Government — 10 times as much. We can see the benefits that have been enjoyed under this Government.

Oral Answers to Questions — Manufacturing and Service Jobs

Mr. Bill Walker: asked the Secretary of State for Scotland if he will provide details of the number of manufacturing jobs in Scotland which are directly involved in Government projects; and if he will also give details of any service jobs which are directly involved in Government projects.

Mr. Allan Stewart: Government support for industrial projects in Scotland takes many forms. Information on employment associated with Government contracts is not available but, for example, offers of new regional development grant in the year to end May were associated with 16,980 manufacturing jobs and 2,440 service jobs in Scotland.

Mr. Walker: I thank my hon. Friend for that reply. Does he agree that many thousands of jobs in Scotland depend on defence programmes such as Trident and Polaris at Coulparts—for instance, at Babcock Power, Ferranti, Rolls-Royce and British Aerospace, all of which depend on continuing Government orders, and that that is what we must protect?

Mr. Stewart: My hon. Friend is absolutely right. As my hon. Friend the Parliamentary Under-Secretary of State for Defence Procurement pointed out in the defence debate, 1·2 million jobs depend directly or indirectly on defence work. In Scotland we have a record of real success. My hon. Friend has mentioned a number of the companies involved. We have strength in electronics, shipbuilding, explosives and similar industries which are heavily dependent on defence work and highly successful in obtaining it.

Mr. Buchan: Does the Minister accept that 250,000 full-time jobs in Scotland have been lost since the Government came to power and that just over 30 per cent. of manufacturing jobs have been lost in that time? Did he read the report of the Scottish economic summit yesterday which said that Scotland urgently needs major public investment? Will he assure the House now that he and the Secretary of State will meet members of the Scottish economic summit to discuss its proposals?

Mr. Stewart: Manufacturing output is up by 10 per cent. on 1983.—[HON. MEMBERS:] "What about jobs?"—The total number of jobs in Scotland is not falling, but rising, and is up 50,000 on mid-1983.

Mr. Craigen: The Minister says that information is not available, but surely he has details of the amount of Government procurement, whether in the manufacturing or the service sectors. Does he think that Scotland is getting a fair proportion of Government purchasing power in the United Kingdom?

Mr. Stewart: Yes. Detailed information is not available in the form requested by my hon. Friend the Member for

Tayside, North (Mr. Walker) but he referred to a number of companies which have been highly successful in obtaining defence work, which is a very important area for the Scottish economy as a whole.

Mr. Michael Forsyth: Does my hon. Friend recall the article on employment in manufacturing industry by the hon. Member for Paisley, South (Mr. Buchan) in the Glasgow Herald in 1978 predicting that more than 3 million people would be unemployed under any Government and said that to blame this on any Government would not get us far because it was entirely due to the increasing number of people coming on to the labour market? Does my hon. Friend agree that the Government have done remarkably well in creating extra jobs in manufacturing and in service industries to mitigate the disaster predicted by hon. Gentleman?

Mr. Stewart: I assure my hon. Friend that the passage that he cited also has pride of place in my library.

Mr. Ewing: As always, the Minister is highly selective in the statistics that he gives. He referred to 50,000 extra manufacturing jobs since 1983. Why does he not tell the House how many jobs have been lost since 1979 and confess that fewer people are working in manufacturing industry in Scotland now than when the Tory Government came to power in 1979? Is the Minister proud of the fact that 100 of the 16,000 jobs that the Government claim to have created are in the manufacture of Skoal Bandits, which will be responsible for killing people rather than creating jobs? When the Secretary of State is involved in his favourite pastime of totting up the cost of the next Labour Government's programme, will the Minister bear in mind that part of that cost will be getting people back to work, because the next Labour Government will invest in public expenditure to get hundreds of thousands of people back to work and to create good services?

Mr. Stewart: The hon. Gentleman's reference to Skoal Bandits was irresponsible. As he knows, the Government have supported the Bill that was introduced by the hon. Member for East Lothian (Mr. Home Robertson) on that subject. More generally, it is astonishing to hear from the hon. Gentleman these forecasts of what would happen under a Labour Government, because he was a member of a Labour Government under whom 10,000 manufacturing jobs on average were lost every month.

Sir Hector Monro: Will the Government take credit for the excellent road building programme in Scotland, both in the interests of jobs and of the environment? Is he aware that the people of Dumfries and Galloway are very pleased with the proposed start of the Annan to Gretna bypass in the autumn, and with the further improvements this year, and that they look forward with interest to the start of the Dumfries bypass as soon as possible?

Mr. Stewart: I am grateful for the comments of my hon. Friend. As the House knows, he has been assiduous in ensuring that the road needs of his constituents are fully considered by the Scottish Office.

Mr. Kennedy: Given the historic difficulties of siting manufacturing industry capacity in the Highlands, when does the Minister think that his economic policies will be sufficiently successful to replace, either in a direct manufacturing capacity or in a subsequent service capacity, the horrendous loss of jobs in the Highlands through the closure of the pulp mill in the constituency of


my hon. Friend the Member for Inverness, Nairn and Lochaber (Sir R. Johnston), and through the closure of the smelter at Invergordon in my constituency?

Mr. Stewart: The hon. Gentleman will know of the very substantial support that is given to the Highlands and Islands Development Board. As I have emphasised, the total number of jobs in Scotland has been rising and the prospects now for the Highlands, as for the rest of the country, are for the best combination of growth and reflation for a generation.

Mr. Henderson: Does my hon. Friend recall that on several visits to north-east Fife recently, and perhaps particularly on his visit to Auchtermuchty, he met manufacturers who had made a substantial contribution to the increase in employment in Scotland through being very effective, despite having no regional development assistance? In addition to those successful manufactures, which include hosiery, ties and things like that, will my hon. Friend bear in mind that the greatest amount of employment in a constituency such as mine is in the service industries, and that the largest single employer is the Ministry of Defence?

Mr. Stewart: I am grateful to my hon. Friend. I recall with pleasure my visit to Auchtermuchty and to his constituency where there is, as he pointed out, a large number of relatively small firms which are showing enterprise by creating wealth and new jobs. My hon. Friend is also right to point to the importance of service industries. Almost two Scots in three are now employed in service industries. That pattern is common to the whole industrialised world.

Oral Answers to Questions — Electricity Generation

Mr. Douglas: asked the Secretary of State for Scotland if he will make a statement on the proportion of electricity which it is expected will be generated from coal-fired power stations in Scotland in the years 1986 to 1990.

Mr. Rifkind: I am advised by the South of Scotland Electricity Board that, following negotiations, an agreement has now been concluded with the National Coal Board for coal supplies in 1986–87 and that the approach adopted in these negotiations should allow a stable coal requirement in Scotland through to the mid-1990s.

Mr. Douglas: I have heard many replies from the Secretary of State, but will he concede that that reply was an exercise in obfuscation? The question asked what proportion of electricity supplies would be related to coal burn. Will he reply to that question? Is it not true that he is disclosing a reduction in coal burn and a threat to mining jobs throughout the whole community and particularly in my constituency? Will he concede that the Coal Board is being forced to bring down prices because of oil prices? Will he meet both boards, through the Secretary of State for Energy, to get a rational view of coal burn in the next few years, with particular regard to refurbishing existing stations such as Kincardine?

Mr. Rifkind: I understand that both British Coal and the SSEB are content with the agreement that has been reached. The hon. Gentleman must be aware that the at the SSEB has a statutory responsibility to try to ensure that electricity tariffs for its consumers are as cheap as possible. Given the substantial fall in oil prices, both the

CEGB in England and Wales and the SSEB have had successful negotiations, which will lead to a continuing substantial use of coal and ensure that coal tariffs—not just for domestic consumers but for Scottish industry—will be at a level compatible with their needs.
If the hon. Gentleman wants electricity boards to use more coal than they need, he is doing a disservice to Scottish industry, which must bear greater energy costs than is the case elsewhere in the United Kingdom.

Mr. Michael Forsyth: Will my right hon. and learned Friend take every opportunity to remind the elderly and those on supplementary benefit in Scotland that, if the Opposition had their way on energy policy, they would get rid of nuclear power and substitute more expensive coal generation? As a result, heating costs would go up by 30 per cent. Does that not show the sheer hypocrisy of their campaign last year when they said that they were concerned about heating costs?

Mr. Rifkind: My hon. Friend says no more than the truth. The Opposition must come to terms with the fact that, if they wish to discontinue the use of civil nuclear power in Scotland, they are saying to their constituents and to Scottish industry that electricity costs will go up by between 25 and 30 per cent. [Interruption.] No. My hon. Friend said that the figure was 30 per cent. I am saying that it is between 25 and 30 per cent. If the hon. Gentleman cannot hear properly, that is his problem, not mine.

Mr. Strang: Will the Secretary of State take this opportunity categorically to deny the report in today's Daily Record that the Government and the Coal Board are contemplating the closure or Monkton Hall and a major cutback in Bilston Glen collieries? Does the Secretary of State recognise that anything remotely like that would be an act of industrial sabotage against Scotland and would be a criminal attack on employment prospects in Lothian? Will the Secretary of State give a clear assurance that, as long as he is Secretary of State, both those major collieries outside Edinburgh will continue to contribute to our economy and to employment in Lothian?

Mr. Rifkind: The hon. Gentleman knows perfectly well that I am not responsible for the coal industry. I shall give no such assurance, because it does not come within my area of responsibility. I understand that British Coal has had discussions with the mining unions and has considered areas of concern affecting the coal industry. I understand that no decisions have yet been reached. As a consequence, we must await developments.

Mr. Bill Walker: Does my right hon. and learned Friend agree that it would be irresponsible, in the nation's interests, not to have a balanced programme on energy, involving hydro-power, oil and coal, as well as nuclear? It is by that balance that the nation is best served. Anyone who suggests that any single area should have priority over others, because of short-term advantages to that area, is not taking the nation's best needs into long-term consideration.

Mr. Rifkind: My hon. Friend is correct. I suggest to hon. Gentlemen that they read the excellent speech by my right hon. Friend the Secretary of State for Energy, in which he pointed out that failure to use the opportunities offered by civil nuclear power would be disastrous, not only to the United Kingdom and Europe, but to Third world countries, in the years to come.

Mr. Wilson: Is the Secretary of State aware that the export level of electricity to England from Scotland is one third of what it was during the miners' strike last year? In view of the huge over-capacity that exists, and which will be magnified on the commissioning of Torness, what does he intend to do? Will action taken be at the expense of the coal industry, as has been suggested?

Mr. Rifkind: The SSEB has a continuing interest in a healthy coal industry in Scotland. Indeed, it expects to see itself using a substantial amount of coal in the years to come. Clearly its primary responsibility, under statute determined by the Parliament, is to meet the needs of its consumers. It is encouraging that the SSEB sees coal as playing an important part of helping it to meet its obligations.

Mr. Dewar: The right hon. and learned Gentleman may not be responsible for the coal industry, but he does have an interest in employment in Scotland. He must be more forthcoming. Is it true, as has been reported to me, that, under the agreement, the SSEB coal burn will be 3·6 million tonnes per annum? If so, does that not represent a considerable drop in current levels, which are around 5 million tonnes per annum? Would not a decrease of 1·4 million tonnes per annum have a significant impact on employment in the coal industry? Does that not underline the fears about pits such as Monkton Hall and Bilston Glen, which have always been seen as having a secure future? Can the right hon. and learned Gentleman say what estimate his Department has made of the impact of such a cut? If he cannot give those figures today, will he find out what they are and report back to the House at the first possible opportunity?

Mr. Rifkind: I have not yet seen the detailed figures arising from an agreement between the SSEB and British Coal because that agreement has only been concluded in the recent past. The SSEB has made it abundantly clear that it wishes to continue using significant and substantial amounts of coal. It is likely that its demand for coal will be less than it was, because of this agreement. That would follow the pattern of agreements reached elsewhere in the United Kingdom with the Central Electricity Generating Board. The hon. Gentleman must appreciate that it is the board's duty to meet the interests of the Scottish public and Scottish industry. If it had failed to meet that duty, I believe that the hon. Gentleman would have been the first to complain on behalf of Scottish consumers.

Mr. Douglas: On a point of order. Mr. Speaker. In view of the inadequacy of the reply, I give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.

Oral Answers to Questions — Fisheries (Net Mesh Sizes)

Mr. Kirkwood: asked the Secretary of State for Scotland if he plans to meet the Scottish Fisherman's Federation to discuss the impact of European Economic Community proposals to increase net mesh sizes on the Scottish east coast fishery.

Mr. John MacKay: My right hon. and noble Friend the Minister of State met a delegation from the federation to discuss this matter on 6 May.

Mr. Kirkwood: I am sure that the hon. Gentleman and his right hon. and noble Friend would have been made

aware at that meeting of the vital importance of the retention of the 80 mm net regime to the continuation of inshore fisheries out of ports such as Eyemouth in my constituency. If a 90 mm net is introduced, it will effectively eliminate the whiting fishery for inshore ports such as Eyemouth. I offer the hon. Gentleman an invitation. I shall give him a Bank of Scotland new pound note for every whiting he can catch with a 90 mm net off the coast of Eyemouth.

Mr. MacKay: I know the problem that exists. Recently, when I visited the constituency of my right hon. and learned Friend the Solicitor-General, I met fishermen at Arbroath who explained the problem. There is a difficult balance between conservation and the number of whiting that the fleet can catch and the number of under-sized fish that are discarded. We are continuing to discuss these matters at Brussels. We must try to strike a sensible balance in the industry's long-term interests.

Sir Hector Monro: Does my hon. Friend agree that the best way to help the east coast fishery would be to agree with the Department of Agriculture, Fisheries and Food to phase out the north-east of England drift nets, which have such a damaging effect on salmon and sea trout stocks coming to Scotland?

Mr. MacKay: I have heard what my hon. Friend has said about this matter, but I do not think that it comes within the scope of the argument on 80 mm and 90 mm nets.

Mr. Donald Stewart: As the EEC has been able to agree a derogation to 80 mm for whiting in the Kattegat and Skagerrak, why is the Scottish Office not able to do something along the same lines to protect the Scottish whiting industry?

Mr. MacKay: I am sure that the right hon. Gentleman will recall that we recently had considerable difficulties in Europe with the pout fishery in regard to the by-catch and discard of undersized white fish. This is a much more difficult question than the right hon. Gentleman seems to appreciate. We are considering with the European Commission officials whether it is possible to derogate for whiting only. I am sure that the right hon. Gentleman realises that that is not easy, because unfortunately the fish do not realise that they must swim only into certain types of nets.

Oral Answers to Questions — Scottish Development Agency

Mr. Pollock: asked the Secretary of State for Scotland if he will increase the resources available to the Scottish Development Agency to tackle environmental needs, including land renewal projects.

Mr. Allan Stewart: In the agency's estimates for the present financial year, which are subject to parliamentary approval, the amount allocated to environmental improvement and land renewal is £38·6 million. This is £4·2 million greater than the corresponding provision made last year.

Mr. Pollock: I thank my hon. Friend for that reply. I urge him to press the Scottish Development Agency to recognise the full value of land renewal projects, such as the Kingston village project in my constituency, and to encourage the SDA to work as closely as possible with other national agencies such as the Forestry Commission


and the Countryside Commission to co-operate on joint projects that can enhance the locality for the benefit of residents and visitors alike.

Mr. Stewart: I appreciate the point made by my hon. Friend, who has corresponded with me about the project in his constituency. I know that the SDA is always anxious to work in co-operation with other agencies, but I will ensure that it takes of board the point made by by hon. Friend.

Mr. McKelvey: Will the Minister reflect on the response that he gave to me last week on a question about the SDA? Having seen the table detailing the way in which the SDA spends its money throughout Scotland, will he give serious consideration to the fact that there are massive disparities and that the SDA is feeding its pet projects year after year, to the detriment of other areas such as Kilmarnock? Therefore, will he initiate an inquiry at the highest possible level into how the SDA budgets are managed?

Mr. Stewart: The SDA must take account of the economic returns on projects which are put to it. I can tell the hon. Gentleman that the SDA has responded to public concern over the priority given to environmental schemes and in future it will assess such schemes in accordance with environmental priorities as well as the economic impact of particular projects.

Mr. Hirst: Does my hon. Friend agree that the Scottish Development Agency has done outstanding work over the past few years on land renewal projects? Is he aware of the letter which the chairman of the Scottish Development Agency recently sent to COSLA confirming that the support of the agency for the Glasgow garden festival in no way compromised the ability of the agency to continue to fund and support land renewal projects?

Mr. Stewart: I am aware of that letter. In the current year, which is the peak for expenditure on the garden festival, it will account for only about one third of the agency's total land renewal budget. It is also worth emphasising that the garden festival is important not only to Glasgow but to the whole of Scotland.

Sir Russell Johnston: Can the Minister confirm that he will give his fullest support to the approach to the Treasury which will be necessary to enable the SDA to spend money on the Aonach Mor ski development on Ben Nevis, which combines environmental protection with extremely exciting and necessary economic potential for Lochaber?

Mr. Stewart: That project is under consideration in general terms in my Department, but the Highland and Islands Development Board, which is also involved, and the Scottish Development Agency have not yet put forward a detailed submission seeking the formal approval of Ministers. Of course we shall consider that as soon as it is submitted.

Mr. Ewing: Will the Minister accept that the Opposition are grateful to him and his colleagues for the support given to the SDA against the background of their having voted against its establishment by the Labour Government? May I have an assurance from the Minister that the increase in the land renewal budget of the SDA will not come from another part of the agency's programme?

Mr. Stewart: The Scottish Development Agency is a wholly different institution in the way that it operates

under this Government compared to the way it operated under the Labour Government, in a number of important respects. I must emphasise that there has been a steady increase in both real and cash terms in the resources available to the Scottish Development Agency, and this year it will have over £136 million to spend on all its programmes.

Oral Answers to Questions — Legal Aid

Mr. Fairbairn: asked the Secretary of State for Scotland how many appeals against refusal of legal aid were successful in the last three years for which figures are available.

Mr. Rifkind: No appeal may be made against the refusal of legal aid in criminal cases. In civil cases, 135 appeals were successful in 1981–82, 237 in 1982–83 and 224 in 1983–84.

Mr. Fairbairn: I thank and congratulate my right hon. and learned Friend and the Government on the sensitive response that they made to the criticism from both sides of the House on the scheme proposed under the Legal Aid (Scotland) Bill. May I say that the reforms announced improve not only on the Bill but on the present situation? If my right hon. and learned Friend deals with the same matters, which are still in contention, on Report he will earn the lasting gratitude of the people of Scotland, who are either accused by the state or find themselves in conflict with other citizens, including the state.

Mr. Rifkind: I have found my hon. and learned Friend to be appealing for many years, and I am happy that on this occasion his appeals have borne fruit. I accept that there was some convincing and persuasive argument that the system should be introduced at present. Of course, in due course the Government will bring forward detailed proposals that meet that requirement.

Oral Answers to Questions — Mentally Handicapped People

Mr. Canavan: asked the Secretary of State for Scotland whether he is satisfied with the standards of care for mentally handicapped people in hospitals and in the community.

Mr. John MacKay: The Government have made it clear to health boards, which have the primary responsibility for services for the mentally handicapped, that those services should be given greater priority. There have recently been significant improvements, but much still remains to be done, and we are monitoring developments.

Mr. Canavan: Does the Minister agree that the vast majority of staff at hospitals such as the Royal Scottish National hospital in my constituency are very dedicated to their patients, but the main problem is that there are not enough staff? In view of the problems arising from staff shortages, as highlighted in the recent television coverage and also in the Mental Welfare Commission for Scotland report, will the Minister give a commitment that he will give enough resources to the Forth Valley health board area to employ the 600 extra nurses required to bring the RSNH up to the Telford standard, and also the £12 million necessary to implement the health board's longterm strategy of moving towards maximum community care, while at the same time improving hospital provision for patients who, unfortunately, will require hospital care probably for the rest of their lives?

Mr. McKay: I am happy to associate myself with the first part of the hon. Gentleman's remarks about the dedicated work of the staff who work in hospitals such as the RSNH. Over the past four years we have managed to increase the number of nursing staff in that hospital by about 200. At the same time, we have managed to reduce the number of patients, so we are making progress. On 10 June officials in my Department met the board and discussed the future plans for the hospital, which, as I am sure the hon. Gentleman knows, involve scaling down the size of the hospital so that it becomes a much more manageable institution, and, I believe, a better one.

Oral Answers to Questions — SOLICITOR-GENERAL FOR SCOTLAND

Legal Services (Costs)

Mr. Fairbairn: To ask the Solicitor-General for Scotland if he will estimate the cost of time, travel and inconvenience occasioned by the separation of the Crown Office from Parliament House and the separation of the procurator fiscal's offices from the sheriff courts.

The Solicitor-General for Scotland (Mr. Peter Fraser): It is not practicable to attempt to estimate generally the costs involved. However, with regard to the Crown Office, savings would he likely to be made if it were situated closer to or connected with Parliament House, and it would certainly be more convenient.

Mr. Fairbairn: Does my hon. and learned Friend appreciate that those of us who understand the workings of the courts find the separation of those who have to work in the courts, whether it is in the fiscal's office or the Crown Office, to be inconvenient and expensive, and an unnecessary burden on public expenditure? Will the Government do all that they can to redeem that unnecessary cost so that the service can be provided more frugally, sensibly and efficiently?

The Solicitor-General for Scotland: I shall attempt to give an undertaking. As I said in my orginal answer, it is our desire to get the Crown Office located where it will be possible for Crown Office staff to have more access to the High Court. As my hon. and learned Friend rightly says, there is the other side of the question. It would be much more convenient for those on the defence side who want to make contact with the Crown. I hope that as a consequence of that there might be greater agreement before we go into court in future.

Mr. Wallace: I know that many people who are involved in the legal system in Scotland will be pleased to hear the Solicitor-General showing some flexibility and saying that the Crown Office might be closer to the courts once again. Does he not agree that there could be a double benefit? If the Crown Office were to move out of the old Royal High, it could once again be used for the purpose for which it was primarily intended — a Scottish parliament?

The Solicitor-General for Scotland: One of our proposals would be to relocate the Crown Office in Chambers street. That would be useful for the first purpose that the hon. Gentleman mentioned. With regard to the second part of his question, I am surprised that, after Monday, he thinks that it is an appropriate building. Given the attendance of Opposition Members, clearly it is far too large.

Mr. Michael Forsyth: Does my hon. and learned Friend agree that after the performance on Monday, when there were bits falling off the ceiling, the time has come to dispose of that building and to return it to the use for which it was intended, as a school?

The Solicitor-General for Scotland: I do not know whether it would be appropriate to use the building as a school, but I shall rely on the ingenuity of my hon. Friend to produce a scheme that will be of benefit to the public purse.

Mr. Ron Brown: Despite our present problems, lawyers do very well out of the system. They get rich, fat fees do they not? Is not the real difficulty that it is the general public who suffer? I think immediately of the many innocent miners who were unfairly dismissed and who have no chance of receiving justice or even assistance. They want to know whether justice still exists in this country. Will the Solicitor-General intervene to help them?

The Solicitor-General for Scotland: I shall not intervene, as I am not sure how I possibly could. If the miners wish to seek legal remedies they can use industrial tribunals. But if they feel that they should have access to the court, there is, as the hon. Gentleman will appreciate, a very generous system of legal aid, which has been significantly upgraded under this Government.

Mr. Dewar: Will the Solicitor-General note that we strongly feel that using the Royal High school as a meeting place for the Scottish Grand Committee is totally justified? The widespread coverage of, and public interest in, the lively debate on Monday makes that point. This is a matter of considerable interest in Scotland, so will the hon. and learned Gentleman say whether the Government are thinking of disposing of that building on the commercial open market? If so, what is the time scale? If that is a positive plan, we would want to know about it at the first possible opportunity.

The Solicitor-General for Scotland: The hon. Gentleman will recall that it was my motion that allowed for the Scottish Grand Committee to move from the House to Edinburgh. He is being far too sensitive about an alternative use for the Royal High school building. As I said in my original answer, there are distinct advantages in moving the Crown Office back to a location that is closer to Parliament House. It will be convenient not only for the prosecution but for the defence. Beyond that, the hon. Gentleman is speculating too wildly on any future use of the building.

Procurator Fiscal, Kilmarnock

Mr. Lambie: asked the Solicitor-General for Scotland if he is now in a position to pay a visit to the procurator fiscal's office in Kilmarnock.

The Solicitor-General for Scotland: I intend to visit the procurator fiscal at Kilmarnock over the summer.

Mr. Lambie: Is the Solicitor-General aware that when I drew the Lord Advocate's attention to the case of Mr. Chris Walker, who had been sacked by Irvine development corporation, he suggested that the case was more suitable for consideration by an industrial tribunal. That was in April 1985. Is the Solicitor-General futher aware that in April 1986 an industrial tribunal in Glasgow found that Mr. Walker had been unfairly dismissed? In view of the


serious issues involved in the evidence and submissions to that tribunal, is the procurator fiscal or the Lord Advocate now prepared to look at all the issues involved, including private work, the placing of contracts, and the part played by individuals and companies in the affairs of Irvine development corporation?

The Solicitor-General for Scotland: As the hon. Gentleman will appreciate, my noble and learned Friend the Lord Advocate wrote to him about the matter last year and indicated at that time, ex acie, that the matters appeared to reveal no criminality on the part of any individual. However, if, following the appeal to the industrial tribunal, the hon. Gentleman or anyone else feels that there are matters of criminality that require further investigation, I should be grateful if he would let me know. I will undertake to see that they are looked into.

Mr. Bill Walker: When my hon. and learned Friend visits the procurator fiscal at Kilmarnock, will he advise him of the Crown Office's determination to ensure that the procurator fiscal service is staffed by men and women of the highest calibre, and inform him that the Crown Office is confident of their future integrity?

The Solicitor-General for Scotland: I am grateful to my hon. Friend for that question. I should be glad to pass on that point. However, I should have thought that there was still considerable confidence among hon. Members on both sides of the House in the independence of the procurator fiscal system in Scotland.

Mr. Malcolm Kelly

Mr. Foulkes: asked the Solicitor-General for Scotland what action he has taken regarding representations about possible illegality in proceedings surrounding the dismissal of Malcolm Kelly by the Northern Lighthouse Board; what precautions he took to ensure that final consideration and decommission on the matter was carried out by someone who is not a Commissioner of Northern Lights; and if he will make a statement.

The Solicitor-General for Scotland: As my noble and learned Friend the Lord Advocate explained in a recent letter to the hon. Gentleman, Crown counsel have instructed that the police investigate certain allegations. Neither the Lord Advocate nor I will have any involvement in the matter.

Mr. Foulkes: Will the Solicitor-General for Scotland —I note that, appropriately, that he is wearing his tie as a Commissioner of Northern Lights — give a clear assurance that if the police inquiry shows any irregularity or illegality there will be a review set up either by the Lord Advocate or the Secretary of State for Scotland to consider overturning the decision of the industrial tribunal on the sacking of Malcolm Kelly and what compensation might properly be made available to him?

The Solicitor-General for Scotland: As I have already said, Crown counsel have been instructed to carry out an investigation. It remains to be seen what will emerge from the investigation. It is not for me to pre-empt any consideration of it. As a commissioner, I would not have any personal involvement — the same applies to my noble and learned Friend the Lord Advocate—as I am aware that certain of the allegations are against me.

Dogs

Mr. Kirkwood: asked the Solicitor-General for Scotland how many prosecutions were taken against individuals for offences relating to control of dogs for the last five years for which figures are available.

The Solicitor-General for Scotland: The total numbers of persons prosecuted for such offences, including the failure to pay dog licences are: 1981, 660; 1982, 701; 1983, 597; 1984, 553; 1985, 484.
I will, with permission, Mr. Speaker, circulate a breakdown of these figures in the Official Report

Mr. Kirkwood: That answer is very helpful. Is the Solicitor-General aware that there is concern that perhaps more could be done to try to control and limit the number of dog control offences that are being committed? Will he give us an assurance that he will consult his colleagues south of the border to ensure that the imminent Government proposal to abolish the dog licence will be considered carefully to ascertain what authority and powers local authorities will have to control dogs in future?

The Solicitor-General for Scotland: It is not for me to consider whether dog licences should be retained or abolished. The hon. Gentleman will appreciate that there is a wide range of offences already in Scotland relating to the regulation of dogs. In the Civic Government (Scotland) Act 1982, further provision was made to avoid what can be the unpleasant nuisance that is caused by those who are irresponsible in their ownership of dogs, and not so much by the dogs themselves.

Following are the figures:


Offence
1981
1982
1983
1984
1985


Cruelty to dogs
31
25
38
29
21


Failure to pay dog licence
255
251
203
147
145


Protection of livestock from dogs
136
163
157
130
131


Guard Dogs Act 1975
20
21
17
13
11


Other offences involving dogs
218
241
182
234
176

Sporting Events (Wagers)

Mr. Richard Holt: On a point of order, Mr. Speaker. Yesterday you made a ruling on Members' dress. You showed a most enlightened attitude in some respects, although I do not necessarily agree with it. As I am sure you are aware, Mr. Speaker, a most important sporting event is to take place on Wednesday 16 July. It would seem not inappropriate that we should be able to have the odd wager on who might win or lose. I find, Mr. Speaker, that only games of chess can be the subject of the odd wager in the House. Would it not be appropriate, in line with your modern thinking of yesterday, that: we should have a bookmaking facility to raise funds for your charity next Wednesday?

Mr. Speaker: That is very ingenious. I believe that there are certain Members who make a speciality of that sort of thing. If the hon. Gentleman will come to see me privately, I shall tell him who they are.

Education and Training

Mr. Speaker: Mr. Kenneth Clarke.

Mr. Donald Dewar: On a point of order, Mr. Speaker, I understand that a significant statement is about to be made—I have not seen the text —on vocational education and training. May I inquire through you, Mr. Speaker, whether the Minister who is to make the statement will deal with questions about Scotland? I ask this because on the Order Paper there is a written question in the name of the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley)—No. 140—which asks the Secretary of State for Scotland to make
a statement on vocational education and training in Scotland.
A statement is something of a misnomer, as the response will be a written answer.
If the Paymaster General is not to deal with the Scottish aspects of vocational education and training, Scottish Members will not be able to raise any parallel or Scottish difference points and will not have rights that will be available to Members from other parts of the United Kingdom. I want to be clear on whether Scottish Members can ask questions of that sort and whether something can be done to protect their interests.

Mr. Speaker: I am unable to answer that question because I have not heard the statement yet. But perhaps the Paymaster General will be able to enlighten us in his opening words.

Mr. Gordon Wilson: On a point of order, Mr. Speaker.

Mr. Speaker: Is it the same point of order?

Mr. Wilson: It is in connection with this matter.
By arrangement with the House, Members of the Scottish National party receive advance copies of statements on Scottish business. I have checked and apparently we do not have a statement on this. If the statement is to refer to Scottish business, we shall be at a disadvantage.

The Paymaster General and Minister for Employment (Mr. Kenneth Clarke): The position in Scotland will, I trust, become clear in the course of the statement and the subsequent exchange of questions. My responsibility for the Manpower Services Commission extends to Scotland and I am making this statement because it appertains to the work of the MSC. It also has implications for Scotland and I shall be in a position to answer questions on that.
But, with permission, Mr. Speaker, perhaps I should first make the statement, which is about major Government decisions on vocational education and training announced in the White Paper published this afternoon. They are about the national extension of the technical and vocational education initiative and the reform of vocational qualifications.
The technical and vocational education initiative was launched on a pilot basis by my right hon. Friend the Prime Minister in November 1982. In chosen schools since then the Government have, through the Manpower Services Commission, made additional funds available to local education authorities to develop new ways of

increasing the vocational content of the curriculum and offering pupils of all abilities between the ages of 14 and 18 more work-related learning.
By the end of this year there are likely to be almost 100 education authorities in England, Wales and Scotland taking advantage of the initiative; which will be covering over 600 schools and colleges and helping nearly 50,000 pupils.
As the pilots have developed, so too has appreciation of the way in which TVEI has been able to enrich the curriculum. It has opened up new opportunities for more young people of all abilities to see how school can be made more relevant to adult and working life.
We want to keep up the momentum and to extend the benefit to many more pupils. We have decided that the MSC should be asked to administer the extension of TVEI from a pilot to a national scheme beginning in the autumn of 1987.
The Government are making a substantial financial commitment to this improvement in our schools. We are setting aside sums which build up from £12 million in 1987–88 to £41 million in 1988–89 and to £84 million in 1989–90. The average annual expenditure over the next 10 years or so will be about £90 million. These amounts will be found from the provision we have planned for young people within the MSC's budget.
Each authority's TVEI proposals must be consistent with our overall policy of improving the school curriculum. My right hon. Friend the Secretary of State for Education and Science, who is in his place today, is publishing separately today a statement of the curicular criteria which extension proposals must meet.
The extension of the technical and vocational education initiative to a national scheme is a major advance. But reforming and developing the curriculum in schools is not enough. We also need to improve the vocational qualifications system to encourage more people, young and old, to improve their skills when they have left school. For that reason we are also announcing a new system of qualifications for skilled work at all levels in England and Wales.
Last year we set up a working group under the Chairmanship of Mr. Oscar de Ville to review the pattern of vocational qualifications in England and Wales. The group's report was published in May.
The group concluded that the present system was complex and incomplete, and recommended that a new system of qualifications should be set up within a framework to be called the national vocational qualification. It urged that a National Council for Vocational Qualifications should also be established to work with the existing bodies to set up that framework. The Government accept those recommendations.
The council will be set up in the autumn of this year and will be asked to have the new system of qualifications in England and Wales and Northern Ireland in place by 1991. I am glad to say that Mr. de Ville has accepted our invitation to act as chairman of the council during its all-important formative period.
We shall provide pump-priming funding, but the aim will be that after three years the council will become self-sufficient, from income received from bodies whose qualifications it accredits.
The recommendations of the report have been generally welcomed and we believe that they will lead to a much better system of vocational qualifications, which will be


widely understood and respected by individuals and by employers. We hope that they will be encouraged to invest more time and money in training.
It is vitally important that for young people moving from school to adult working life we have a good system of vocational education and training. All young people must be given the opportunity to leave full-time education or training with relevant qualifications and to build on them throughout their working life. The extension of the technical and vocational education initiative and the setting up of the new framework of national vocational qualifications are major advances towards that objective.

Mr. Barry Sheerman: Regardless of the promises to us about other statements, this statement was made in another place at 3 o'clock. One would have thought that, on the auspicious day of the Paymaster General's birthday, the noble Lord the Secretary of State would have allowed him to go first for a change. If the statement on the extension of technical and vocational education means that technical, academic and practical education will be available to all our students, we broadly welcome it.
From reading the statement, we suspect that the amount of cash will not be enough. Will the Paymaster General tell us how much will be available per school for implementing technical and vocational education and how that compares with the pilot financing? Will he assure us that it is not a case of robbing Peter to pay Paul? Reading between the lines of the statement, it seems that the money for this expansion of the technical and vocational education initiative will come away from the youth training scheme. The YTS is already under-financed and under pressure and the quality of its training is inadequate. If money to fund the TVEI is taken from the YTS, that will lead to a further deterioration in training standards, and we are extremely worried about that.
The Paymaster General spoke about a review of educational and vocational qualifications. Will he think again about the way in which the new council will be set up? Many Opposition Members have great misgivings about the decision of the Government not to take the opportunity to review all qualifications at the same time. There is to be a review of vocational qualifications, but academic qualifications have been left alone.
We are fearful that we will see from the Government an attempt via the back door to introduce a 14-plus or a 16- plus examination to take the place of the 11-plus selection that we all know damaged children's opportunities and perspectives. Will the Paymaster General assure us that he is aware of the dangers of polarisation that arise because of technical education for some children and another more expensive and exclusive type of education for other children.
We have had many statements over the last few years and all of them introduced minor changes, some of which were welcome. Those statements were made against the background of a collapse in our training and technical training. As the National Institute of Economic and Social Research said just last week, there has been a 40 per cent. drop in training since 1982. This statement is small beer compared to the collapse of our training system.

Mr. Clarke: The extent to which statements are first made in one House or in another depends on the procedure of both Houses. This statement was delayed in

this House by the vital matter of Scottish questions. I was able to sit on the throne—[Laughter.]—on the steps of the throne in another place and there I listened to the noble Lord Stoddart of Swindon welcome the statement. He did so with a considerably lesser show of reluctance than the hon. Member for Huddersfield (Mr. Sheerman) has shown, but in the end he welcomed it.
The cash that is being made available for the extension of technical and vocational education is substantial—an average of £90 million a year over a 10-year period. During that period, it will steadily increase as the applications come in and the benefits of the initiative are spread throughout our school system. It will be up to individual local authorities to determine exactly how that money is to be distributed within the schools put forward, but on average it should work out at about £30 extra per school —[Interruption.]—at about £30,000 extra per school in each authority which applies. That is a significant addition to the budget of each school, enabling it to broaden the curriculum and improve the relevance of its education to pupils.
I was delighted to hear the hon. Gentleman defending the youth training scheme, and I think there is a growing realisation among Opposition Members about its value. I am happy to be able to assure him that these arrangements do not in any way jeopardise the YTS or the financing of it. The money is coming from the provision we have made for young people generally. The exact spending will depend on the number of local authorities that take up the opportunity presented by this initiative, and the number of pupils between 14 and 18 years who choose to remain in school, taking part in this curriculum, compared with the number who leave and engage in YTS. Obviously, the total number of young people will not increase in the 10-year period. Indeed, it will fall markedly. For that reason we can make this generous financial provision to schools for extending the curriculum without jeopardising other provision for young people, particularly YTS.
The review of vocational qualifications has also received a general welcome. I believe that that was the implication of what the hon. Gentleman said. The particular qualifications that we have had reviewed and which we shall now have farther reviewed by this new national council are the maze of technical qualifications, which are difficult to understand for parents, would-he trainees and employers looking for qualifications of the right type. The new arrangements will be of benefit to all of them, and will enable a clearer system to emerge and people to know exactly what qualifications of what standard they should aspire to for any particular occupation.
I note what the hon. Gentleman describes as a collapse in training. We know that we have a serious problem and that more resources and effort need to be invested, particularly by employers, into the training and preparation for work, especially of our young people. I do not accept his description, especially when it is applied to the Government's efforts. He knows that as a result of our changes in training arrangements we have virtually doubled the number of adults whom we are assisting in training through Government programmes.

Sir William van Straubenzee: May I ask my right hon. and learned Friend two questions arising from this most welcome statement? First, regarding the new council or otherwise, does the White Paper contain


any mechanisms for monitoring the effects of these new initiatives on academic achievements in schools, for example through the number of pupils taking A-level courses, bearing in mind the evidence published yesterday by the Education Select Committee which seemed to establish a linkage between YTS and the fall in the number of those taking A-levels? Is any monitoring envisaged?
Secondly, although I make it perfectly clear that I intend no personal reference, is this statement not one further proof that the time is past when training as a subject, however ably administered at present, should be brought within the ambit of the Department of Education and Science?

Mr. Clarke: On his first point, I can assure my hon. Friend that we shall monitor the position closely. We are carrying out a number of surveys to see what happens to the post-16 age group. We are hoping to produce a system which will allow for a well-informed choice to be made by more pupils. They will decide whether they wish to remain in school and then pursue an academic course in further and higher education, to leave and join YTS, or to take advantage of this sort of curriculum in a school which has taken advantage of this initiative. We shall certainly study the Select Committee's report.
It is difficult to analyse what has happened to the figures, but it is probably in the interests of some pupils, for example, to contemplate the possibility of a YTS scheme rather than staying on in the sixth form to retake one or two 0-levels or going through to a full A-level course. We are carefully monitoring what is happening, and the main thing is to ensure that people take well-informed choices in the genuine interests of the individuals seeking to make the transition from school to work.
Obviously I cannot comment on the proposals that my hon. Friend makes about the structure of government, but on the issue that lies behind it, I hope that when he looks at the White Paper he will see it as a considerable breakthrough in narrowing the gap between the world of education and the world of work. It brings together the objectives of good education and good training policy very considerably. The two Departments are working closely together. The beginning of the White Paper contains a statement of the objectives of my Department, and it concludes with a statement of the objectives of my right hon. Friend the Secretary of State for Education and Science. Between the pages is a considerable improvement in the system that will bring the two closer together and make the transition from school to work much better.

Mr. Richard Wainwright: Does the Minister agree that the careers preparation scheme for those between the ages of 14 and 18 has in recent years been confused and frustrating for such people? Therefore, the thrust of his statement is welcome. Can he also assure the House that in the new TVEI—as distinct from a regrettable lack in the pilot TVEIs—there will be ample bridges and ladders for young people who in midstream find themselves on the wrong course so that they can change direction and be assisted to a new level of learning if they prove able to take such courses?
As for the admirable de Ville recommendations, which the Government are so wisely accepting, what precisely will the Government do to enable the 35 per cent. of our

adult work force with no qualifications to obtain them, or are they merely erecting new and rather impressive goal posts without assisting people to shoot for goal?

Mr. Clarke: I totally agree with the hon. Gentleman's extremely clear analysis of the problems that people are facing in moving to their careers from the ages of 14 to 18, and I hope that this statement helps to bridge that gap.
I shall certainly draw the hon. Gentleman's remarks to the attention of those responsible for looking at the applications submitted by education authorities. I am sure that the education authorities will seek to build in the necessary ladders to enable people to correct choices that they might make mistakenly during this vital period of their educational lives.
The criteria for the curriculum that we are setting down are today being published by my right hon. Friend, and it is important that these schemes are set up in the right way.
I am grateful to the hon. Gentleman for welcoming the new system for national vocational arrangements. It is indeed important that a higher proportion of our population get training and qualifications of good quality before and during their working lives. The Government have already doubled the number of people that they are assisting to obtain that training, but it requires a greater effort on the part of society as a whole and British employers to increase the amount of training in our economy.

Mr. Peter Thurnham: I welcome the extension of TVEI, which has been a great success in two schools in my constituency. Is my right hon. and learned Friend satisfied that employers will be able to play their part by providing sufficient work experience places for people on these courses?

Mr. Clarke: I am delighted to hear that the pilot schemes have gone so well in Bolton. I believe that employers will readily provide the number of places required to give work experience to pupils. Such places are of enormous benefit to pupils, because they enable them to have an insight into what it will be like when they take up a career while they are still taking advantage of their

Mr. Jim Craigen: The Paymaster General referred to his MSC responsibilities in Scotland. How much of the £90 million coming from the MSC budget is earmarked for Scotland, and how will the new Scottish Vocational Education Council dovetail with the arrangements that are being proposed for England and Wales?

Mr. Clarke: In answer to the hon. Gentleman's first point, Scotland has taken considerable advantage of the pilot schemes. As Strathclyde is such a large authority, it has several pilots within its territory. I believe that it is the only authority which has several pilot schemes. The announcement that I made today on TVEI applies fully to Scotland, which will receive at least its fair share of the available resources if experience is anything to go by.
My right hon. Friend the Secretary of State for Scotland has decided that he wishes to make progress with the changes already in hand in Scotland under his 16-plus policy. However, the Scottish Office will have observer status in the national council and will keep in touch with developments on the National Council for Vocational Qualifications which will apply directly to England, Wales and Northern Ireland.

Sir Kenneth Lewis: I welcome the statement which my right hon. and learned Friend has been able to make on his birthday, which will help many young people to become better qualified through their education. However, has he had any discussions with the trade unions to enable them to become more up to date? Has he consulted the trade unions with the aim of encouraging them to provide apprenticeships and so help young people when they leave school and enter a place of work? The trade unions are still old-fashioned in that area and it is time that they came to terms with the 1980s and 1990s.

Mr. Clarke: I was proposing to spend my birthday at Wimbledon at one stage. However, I was absolutely delighted to find myself spending my birthday in the Chamber delivering my statement instead, as it is of great value to the young people involved.
Oscar de Ville's working party contained people from the world of education, employers and trade unionists. It was a remarkable achievement that these bodies reached unanimity. They all agreed on the analysis of the problem and the Government have accepted their proposals. One of the most important facets of the new national council's work is that it will accredit qualifications which are based on measuring the standards of performance and ability of someone who has been trained for that qualification. It will rely to a much lesser extent than was previously the case, on time-served or academic qualification before admission can be obtained. That is an important step as it brings everyone concerned into the 20th century and into line with the modern economy that is likely to exist.

Mr. Max Madden: Will the Paymaster General confirm what some of us thought that he said, that the money that he has announced this afternoon represents £30,000 per school? Can he say when he will be ready to receive applications? Will he give an assurance that those local education authorities such as Bradford which have co-operated in the pilot study, will be given sympathy if applications are submitted for the national scheme, bearing in mind that Bradford has been starved of education resources and is unique amongst local education authorities in facing a considerable increase in school rolls?

Mr. Clarke: I will not say that I was leaving a few noughts off my figures, but the figure that I finally gave of £30,000 per school was the correct figure. That would be an average figure. It does not mean that there will be precisely £30,000 for each school. In each case, the local authority will determine exactly how it distributes the money between its various schools. The new national extension will come into effect from September 1987. Obviously, applications will come in and be considered between now and then.
There are a few local authorities which, for one reason or another, have not felt able to participate in the pilots. We will expect these authorities to have a three-year pilot scheme before that is extended. It is important to build up the initiative in such a way that people build on their experience of TVEI. If, as I believe, Bradford has been participating, it should be well placed to submit an application and to take advantage of the scheme on a much wider scale.

Dr. Keith Hampson: Is my right hon. and learned Friend aware that his presence here

today supports the view of my hon. Friend the Member for Wokingham (Sir W. van Straubenzee) about the fact that this is a Department of Employment statement rather than a DES statement? Does he agree that it is odd that some local education authorities are not participating? If it is so important, and the previous Labour Government started this debate in 1977, to have a more practical thrust in British education, the authorities should be required to ensure that all pupils of that age group take part in TVEI.
Will my right hon. and learned Friend comment on the fact that a long time scale is involved under the national vocational qualification — to 1991 — and there is a pressing need to quicken the process up? It is not a good precedent to consider the Engineering Council and the Finniston report and the amount of time that has been taken to get more direction through that body?

Mr. Clarke: On the first point, the present constitutional position is such that this is essentially a voluntary arrangement. It is up to each local authority to decide whether it wishes to participate and whether it wishes to apply for funds. There has, however, been a rapid increase in the number of authorities taking part in the initiative. I very much hope and believe that the remaining 18 will rapidly take advantage of the opportunity again being presented to them to come into the scheme, acquire additional funds and broaden the curriculum available to their pupils.
On the second point, there is a great deal of work to be done by the national council in beginning to pull together the present mish-mash of qualifications. Although 1991 seems some way away, the council has a formidable undertaking to take on in collaboration with all the certifying bodies and all the examination bodies.

Mr. Hugh Brown: Will the White Paper proposals be flexible enough to cater for the special needs of schools in socially deprived areas, where the big problem is in getting 16-year-old low achievers to stay on at school to take advantage of TVEI? If the proposals do not specifically include that, will he and his colleagues look sympathetically at such representations as may he made?

Mr. Clarke: Each local authority will obviously look at the particular problems of its schools when putting in an application and deciding how it wishes to distribute the available funds among the various schools. I very much hope that broadening the curriculum in this way will make staying on at school more attractive to many young people, particularly those living in districts of the kind described by the hon. Gentleman who probably have the most advantage to derive from it. An average amount of £30,000 per school per year can make a significant difference in what a school is able to offer.

Mr. Harry Greenway: May I congratulate my right hon. and learned Friend on widening the scheme? Does he agree that the success of TVEI has been due partly to the value of the course content and thus the pupils' interest in what they are doing and partly to the fact that the scheme has always been well staffed? As the staff required will have to come out of a teacher shortage area, will there be any problems in staffing the widened scheme? Will he also consider giving parity of esteem to pupils involved in A-levels, YTS and


TVEI? Does he agree that if one group is advantaged compared with another, pupils may not always make the right choice for their needs?

Mr. Clarke: I note my hon. Friend's comments about the courses being well staffed. The money available will certainly extend to an additional member of staff—not necessarily always a member of the teaching staff, but perhaps a technician—in each of the schools involved, with other expenditure on equipment, and so on. That is what authorities find best. The extent to which this might increase demand for teachers in shortage subjects is outside my responsibility and outside the scope of my statement today, but it is no doubt being addressed, among other things, by all concerned in the discussions about teachers' remuneration and career structures currently taking place under the auspices of ACAS.
With regard to parity of esteem among the various qualifications, I agree with my hon. Friend. It is important that pupils of all abilities have a clear and intelligible choice before them and that they make the right decision for their own case in terms of what suits their temperament and career wishes. The various paths through A-levels, YTS and TVEI, possibly followed by A-levels or some other qualification, are now coming together to present a much better and clearer way forward for the average 14 to 16-year-old contemplating the possibilities available.

Mr. Derek Fatchett: Does the Minister agree that to get the best value at 14 additional resources are needed for education before the age of 14 and that to differentiate between today's training statement and a possible education statement is dangerous and false in that respect? Is he aware that the recent report by Her Majesty's inspectors shows that the scarcity of resources for books and school buildings is having a damaging effect on education at all ages? Does he accept that until we put education right at an earlier age we shall not obtain the value of the money announced today to do the things that the right hon. and learned Gentleman has mentioned?

Mr. Clarke: On this occasion, we are talking about new resources for local education authorities in a particular part of their education system. My right hon. Friend the Secretary of State for Education and Science will clearly not diminish his interest in problems in the rest of the education system, including the need for more expenditure on books and repairs. I believe that recent reports on the education system show that more money alone is not necessarily the answer. The Audit Commission, Her Majesty's inspectors and others have suggested that improved management of resources also has a part to play.

Mr. Edward Leigh: I welcome today's statement, but has my right hon. and learned Friend considered taking the process further by discussing with our right hon. Friend the Secretary of State for Education and Science the setting up of technical and vocational schools on continental lines, particularly on the lines of the West German hauptschule which I suppose might be loosely translated as "secondary modern"? Do I take it that we are now rejecting the Socialist concept that there is something inferior about technical training and that all children should be force fed with academic training

with the result that large numbers of children leave school without any qualifications at all and totally alienated from the education system?

Mr. Clarke: Like my hon. Friend, I hope that we are rejecting any distinction in status between academic and technical education. The boundary is often artificial and impossible to draw. All these qualifications should be available to pupils of all abilities so that they may choose one route or another. Questions on the structure of our schools should continue to be addressed to my right hon. Friend the Secretary of State for Education and Science.

Mr. Wilson: As the Paymaster General purported to speak as a United Kingdom Minister, why did his statement not explain the impact of the new scheme on Scotland? In view of the disgraceful lack of information provided in response to the question put to him by the hon. Member for Glasgow, Maryhill (Mr. Craigen), will the Paymaster General now tell the House how the scheme will affect Scotland as we have had no information so far?

Mr. Clarke: I made the statement because of my responsibilities for the Manpower Services Commission, which operates in England, Wales and Scotland. I have responsibilities for the MSC in all three countries but not for education in any of those places. I have made it clear that the part of my statement concerned with technical and vocational education applies to Scotland as much as to England and Wales and that we expect full Scottish participation in that initiative. On the review of vocational qualifications, the Scots are pursuing a separate path, having already embarked on their own policy, but they will retain observer status in what we are doing. Both Departments agree that we must have qualifications accepted throughout the United Kingdom. We are keeping closely in line on these matters, but my statement about the new national council does not apply directly to Scotland.

Several Hon. Members: rose—

Mr. Speaker: I will do my best to call those hon. Members who have been seeking to catch my eye.

Mr. Richard Holt: I welcome my right hon. and learned Friend's statement, but I am sorry that his Civil Service advisers did not read the whole of my maiden speech, including the part concerning qualifications, in which I suggested that the City and Guilds might be expanded. Does my right hon. and learned Friend agree that that institution, of well over 100 years' standing, enjoys international as well as national repute, that it has all the qualifications modules on base and that employers accept City and Guilds qualifications beyond all others? hope that it will not be stifled.

Mr. Clarke: A large number of bodies give qualifications of one kind or another, but the field is dominated by a few. Bodies such as the City and Guilds, the Royal Society of Arts and the Business and Technician Education Council all provide very well known and well recognised qualifications and they will continue to do so. The new national council will not supplant them in any way by giving qualifications of its own but will set up a framework into which all the qualifications from the various certifying bodies can be fitted so that they can be accredited by the council and people can understand exactly how one relates to another. People seeking qualifications and employers seeking qualified people will


then have a better understanding of the relationship between one qualification and another. The City and Guilds will continue its very distinguished work, but its qualifications will now fit into a far more intelligible framework governing the qualifications of all the certifying bodies.

Mr. Alan Howarth: I welcome the statement made by my right hon. and learned Friend. Does he agree that the important progress that the Government have made in the provision of opportunities for technical and vocational education needs to be complemented by a vigorous continuation of the programme of my right hon. Friend the Secretary of State for Education to make the content of education more appropriate for less academic children from the primary stage? Does not my right hon. and learned Friend agree that we have to devote too many resources of time and money to remedial education in basic numeracy and literacy in the 14 to 18-year-old age group?

Mr. Clarke: I believe that this policy fits in with the Government's whole policy of examining the content of education in schools to ensure its relevance and to maintain good quality academic standards. Certainly I am told repeatedly that in many YTS schemes a great deal of time has to be spent in the first place on essentially remedial education to make up for deficiencies in the basic skills that my hon. Friend has described.

Mr. Patrick Nicholls: In the event that a local education authority asks for this money and is granted it, can my right hon. and learned Friend assure the House that it will be possible to ensure that that money is used on that project and not generally? For instance, would my right hon. and learned Friend be content to give that money to the alliance-controlled Devon county council which,while constantly criticising the Government for lack of funding for training and educational matters, has just approved £25,000 expenditure on a car for the chairman?

Mr. Clarke: Education authorities can make application to the Manpower Services Commission for the appropriate sum of money. That money will be granted once a deal has been struck between the MSC and the education authority on what the money is to be spent on and what changes are to be made in the curriculum and content of the school's programme. One reason why some local education authorities are not participating at the moment is that they put in applications that were rejected because they would not bring themselves into line with the objectives of the technical and vocational education initiative. That is how we shall ensure that the money being allocated to TVEI goes on worthwhile TVEI objectives. Other than that, I do not want to get drawn into what I hope will be fruitful negotiation between the MSC and Devon county council if it chooses to apply.

Mr. Roger Gale: In congratulating my right hon. and learned Friend on his most welcome statement, may I suggest that the success of the National Council for Vocational Qualifications is likely to rest largely on the calibre of the people invited to serve on it? Can he shed any further light on the criteria that will be used to select people to serve on that body? Can he assure the House that the qualifications that are approved by

that body will bear a relationship to the actual rather than the theoretical needs of industry in general and of the service industries in particular?

Mr. Clarke: As I have announced, during the early formative stages of the council the chairman will be Mr. Oscar de Ville. I am not in a position to announce the full membership. Our objective will be to have people with practical experience of the world of work and of education, who will represent a broad range of interests and experience required to make the system relevant both for trainees and for the needs of industry and the world of work outside. I accept my hon. Friend's introduction, that the success of the council will depend to a large degree on the quality of the people who are appointed and who agree to serve on the council.

Mr. Nicholas Lyell: Is my right hon. and learned Friend aware that the pilot schemes under TVEI in Bedfordshire have been enormously successful, both in the full schools and in the linked schools? Is he aware that almost every upper school will be looking hungrily at the £30,000 that might be available to it? How much, overall, can Bedfordshire expect to get in money terms out of the £90 million?

Mr. Clarke: I am delighted to hear again that the pilot has been so successful in Bedforshire. I am sure that I shall find somewhere an example of a pilot that has not gone down so well, but I have not yet. The reaction of everyone concerned over the country has been pretty well as my hon. and learned Friend has described. Therefore, I suspect that there will be no lack of applications. I regret that off the cuff I cannot put a figure on the likely sum that might go to his county, but if anyone can make an estimate I shall put it in a letter to my hon. and learned Friend.

Mr. Malcolm Thornton: May I assure my right hon. and learned Friend that Crosby and other parts of Merseyside where skill shortages and a general lack of vocational training have been identified as problems, his statement will be greatly welcomed? Can he assure us that in the reform and development of the curriculum there will be adequate monitoring of the input that will be essential from employers and industry if the scheme is to succeed? As my hon. Friend the Member for Thanet, North (Mr. Gale) has already said, it is important to ensure that people of the right calibre are on the council and that they have an input into the reform of the curriculum. That has long been identified as one of the deficiencies in developing vocational training in schools. Can my right hon. and learned Friend assure us that there will be adequate monitoring of that factor?

Mr. Clarke: There will indeed be monitoring of the technical and vocational education initiative as it goes forward. Changes in the curriculum will be determined by agreement between the Manpower Services Commission and the individual local authority. My hon. Friend will be able to see in a written answer by my right hon. Friend the Secretary of State for Education and Science the kind of criteria that we shall expect local authorities to fulfil when they make applications for funds under the initiative. I believe that one of the advantages of the change will be to bring industry and local employers into close contact with the schools, because it is in everybody's interests that schools turn out people who are prepared to meet the needs of local industry to help revive the economy in such a depressed area as Merseyside.

Mr. Peter Bruinvels: I welcome my right hon. and learned Friend's statement and his continuing commitment in supporting technical and vocational training in schools. Does he not agree that one of the major problems is that careers guidance in schools has failed dismally and that the Government have to pick up the tab and give genuine advice? Does he not also agree that the successes of the YTS — [Interruption] —particularly in Leicester where 80 per cent. of those on the scheme now have genuine jobs, shows that the Government are totally committed to giving a real opportunity to the young, something that the Labour party always seems to be negative about. This Government provides real help, genuine qualifications and an opportunity for young people.

Mr. Clarke: It is my impression that the quality of careers guidance available varies considerably from place to place. The criteria we are laying down for TVEI put emphasis on the need for good careers guidance within the schools that participate. I agree about its importance. I am grateful for what my hon. Friend said about the efforts that we are making to help young people. Of course, we still have a desperately difficult unemployment position and we still have far too many unemployed young people. I am glad that the rate of unemployment amongst those under 20 is dropping sharply—by 10 per cent. for that age range. Obviously we have to make sure that that continues. It will continue, partly as a result of the announcement today.

Mr. Sheerman: Can the Secretary of State clear up a mystery that seems to have developed during his answers to his colleagues? The figure of £30,000 per school does not add up to the right amount if he is talking about a national scheme. How soon will this be a truly national scheme covering all schools that want to take part and all pupils? When will he give consideration to the strong point made by the hon. Member for Wokingham (Sir W. van Straubenzee) that, to give real choice and real coordination of that choice at 16, we need educational maintenance allowances? His answer was not good enough. The extent of take-up in staying on at school in this country is appalling compared to our competitors.

Mr. Clarke: The purpose of answering questions is to solve mysteries rather than create them. I shall check on the consequences of my arithmetic for a national scheme. The figures that I gave in the body of the statement show

how we expect expenditure to build up over the first two or three years. We expect average expenditure over the next 10 years of £90 million each year on this initiative. Where we go will depend to a large extent on the way in which local authorities react to the initiative, how quickly they come forward with applications and on their decisions about the extent to which they intend to take advantage of the initiative. It will also in part depend on the way in which young people react and on the effect on the number who choose to stay at school and on the number who choose to go outside to YTS and so on.
In regard to the suggestion about educational maintenance grants to encourage young people to continue studying after 16, I know of no evidence to support the beliefs of some people that the lack of a maintenance allowance reduces significantly the number who stay on after 16. It would be extremely expensive to introduce such a scheme. One has only to consider student grants to realise the difficulties that arise in trying to get the right priority between expenditure on meeting the living costs of the pupils and expenditure on the educational system itself. The expenditure proposed on positive improvements in the quality of education that is available to young people is the first priority for our money.

Mr. Edward Leigh: On a point of order, Mr. Speaker. While my hon. Friend the Member for Leicester, East, (Mr. Bruinvels) was asking his question, I distinctly heard the hon. Member for Islington, North, (Mr. Corbyn) say that my hon. Friend had been raised in a circus. Judging by the dress of the hon. Member for Islington, North, if anyone has been raised in a circus, it is him. But did not the hon. Gentleman make an unparliamentary remark about my hon. Friend the Member for Leicester, East, especially as we were both educated at the same convent?

Mr. Speaker: I am lost for words. Fortunately, my microphones do not pick up everything that is said in the Chamber.

Mr. Jeremy Corbyn: Further to that point of order, Mr. Speaker. Just to clarify the matter, I said that I thought that the hon. Member for Leicester, East, (Mr. Bruinvels) had started his career in a circus, and ended up in a pantomine.

Mr. Speaker: I am glad that I did not hear.

Customs Consolidation (Amendment)

Mr. Chris Smith: I beg to move,
That leave be given to bring in a Bill to update the law affecting the importation of obscene articles and to increase the penalties therefor and to amend the Obscene Publications Act 1959 and the Customs Consolidation Act 1876.
The present law is completely anomalous. Any book or article imported into the United Kingdom is subject to the Customs Consolidation Act 1876. That Act leaves interpretation wide open to individual Customs officers, and sometimes gives rise to highly peculiar decisions about the seizure, impounding or prosecution of particular items. However, any book or article that is home produced and published within the country is subject to the Obscene Publications Act 1959, which carries with it the important test of a tendency to deprave and corrupt, along with the potential defence of literary merit.
For all its faults, the Obscene Publications Act is much better, and much more tightly drawn than the Customs Consolidation Act. It leaves less scope for the operation of arbitrary censorship. Sometimes, the same book can be treated differently under each of the two Acts. For example, a few weeks ago we learnt with sadness of the death of Jean Genet, the French author. Upon his death, the press rightly lavished much praise upon him. His book "Querelle" has been widely available, quite legally, and is approved under the Obscene Publications Act.
However, two years ago that hook was impounded by Customs when it was being imported into Britain, and was made the subject of a prosecution under the Customs Consolidation Act. It is surely nonsense that precisely the same material should be legally available under one Act because it is produced in this country, but should be open to prosecution under another Act, because it is being imported. There is an obvious need to clear up that anomaly and to bring all material, whether home-produced or imported, under precisely the same definition. That is what my Bill seeks to do: to bring all such material within the scope of the Obscene Publications Act 1959.
The law is not only anomalous but has, in recent months, been thrown into confusion. The European Court recently ruled in the Conegate case that any material that was imported from the EEC should be subject to the same

provisions as material produced here, thus creating a difference between material imported from the EEC and material imported from non-EEC countries.
Further confusion has arisen following the Customs and Excise decision of last Friday to drop all its charges against the Gay"s the Word bookshop in Marchrnont street, London. It was right that it should take that decision. The outdated law—the Customs Consolidation Act—was being operated in a discriminatory way. I am delighted that that will no longer happen, but the decision of Customs and Excise leaves a legal uncertainty that requires clarification.
This Bill is the best way of clarifying the situation. Not only is the law anomalous and uncertain, but the existing state of the law inappropriately diverts resources which could be much better employed in the real protection of this country. With a flood of hard drugs coming into Britain from abroad, and with reductions in the staffing of the Customs and Excise service, Customs officers must have better things to do than to act as censors of what the British public can or cannot read or buy.
The Bill is a simple measure which carries within it a simple point. It is supported by the Booksellers Association, the Publishers Association, the Society of Authors, the National Council for Civil Liberties and the Society of Civil and Public Servants, which organises staff within the Customs and Excise service. The Bill will help to make sense of an anomalous, absurd and out-dated bit of law that has been, and can be, used in a profoundly discriminatory fashion.
I commend the Bill to the House.

Question put and agreed to.

Bill ordered to be brought in by Mr. Chris Smith, Mr. Andrew F. Bennett, Mr. Alex Carlile, Mrs. Ann Clwyd, Mr. Jeremy Corbyn, Mr. Alfred Dubs, Miss Janet Fookes, Ms. Harriet Harman, Mr. Michael Meadowcroft, Mr. Peter Pike, Ms. Jo Richardson and Mr. Clive Soley.

CUSTOMS CONSOLIDATION (AMENDMENT)

Mr. Chris Smith accordingly presented a Bill to update the law affecting the importation of obscene articles and to increase the penalties therefor and to amend the Obscene Publications Act 1959 and the Customs Consolidation Act 1876: And the same was read the First time; and ordered to be read a Second time upon Friday 4 July and to be printed. [Bill 195.]

Supplementary Benefit

The Minister for Social Security (Mr. Tony Newton): I beg to move,
That the draft Supplementary Benefit (Requirements and Resources) Miscellaneous Amendment Regulations 1986, which were laid before this House on 18th June, be approved.

Mr. Deputy Speaker (Sir Paul Dean): With this, I understand that it will be convenient to discuss the following:
That the draft Supplementary Benefit (Requirements and Resources) Amendment Regulations 1986, which were laid before this House on 26th June, be approved.
That an humble Address be presented to Her Majesty, praying that the Social Security (Unemployment, Sickness and Invalidity Benefit) Amendment (No. 2) Regulations 1986 (S.I., 1986, No. 1011), dated 13th June 1986, a copy of which was laid before this House on 18th June, be annulled.
That an humble Address be presented to Her Majesty, praying that the Supplementary Benefit (Conditions of Entitlement) Amendment Regulations 1986 (S.I., 1986, No. 1010), dated 13th June 1986, a copy of which was laid before this House on 18th June, be annulled.
That an humble Address be presented to Her Majesty, praying that the Housing Benefits Amendment (No. 3) Regulation 1986 (S.I., 1986, No. 1009), dated 13th June 1986, a copy of which was laid before this House on 18th June, be annulled.

Mr. Newton: It must be acknowledged that any link, other than for debating purposes, between some of these regulations is somewhat tenuous. The regulations refer to two particular aspects of the benefit system, and so my speech will correspondingly fall into two halves. I shall discuss first those parts of the regulations that concern the position of students in relation to social security.
As the House knows, the background to the proposals can be found in the view expressed now for a long time by the Government, which is reflected in the social security Green Paper of 1985 and in the social security White Paper of December 1985, and which has been clearly stated by my right hon. Friend the Secretary of State and myself several times in the House. In the long term, it cannot he sensible that students be subject to two separate but related systems of support. It cannot be satisfactory to have students permanently dependent on a system—the social security system—that is principally designed for those who, for various reasons, cannot work, rather than for those who have withdrawn voluntarily from the labour market in order to study.
That general view is not confined to the Government. As the Opposition and others have fairly made clear, it also has their broad assent. The same is true of the Social Security Advisory Committee and of many students. The issue in relation to students is perhaps not one of principle, but of how we can return to a situation that almost everyone really wants.
In January, the Government published a set of proposals concerning social security benefits for students and associated proposals concerning the grant for students living away from home. Those were put to the Social Security Advisory Committee for consultation. I pay tribute to the committee. It engaged in a substantial and thorough consultation exercise. We are grateful to the committee for its work.
I met the National Union of Students in what I felt, and I hope it felt, was a useful and constructive meeting. I need

hardly say that Ministers and officials received a substantial stream of representations from Members of Parliament and others about the consultative proposals.
It is fair to say that the consultation revealed a view that, while some steps on social security were generally thought to be appropriate, others went somewhat further than was generally felt right at that stage. It was felt that some of the proposals needed further consideration in conjunction with a review of the main system of student support.
The Government have responded considerably to both those lines of concern. The social security proposals have been modified significantly. However, they maintain the proposed £36 additional grant increase to students living away from home. As my right hon. Friend the Secretary of State for Education and Science said in a statement to the House on 18 June, the Government have
decided to institute a comprehensive review of all aspects of financial support for students"—[Official Report, 18 June 1986; Vol. 99, c. 1046 ]
The debate is concerned with the modified social security proposals. It may be easier if I deal with them in terms of comparison with the proposals originally put forward in January. Essentially, we are proceeding with four of the original changes in the forthcoming academic year — 1986–87. First, supplementary benefit and unemployment benefit will be removed in short vacations. I emphasise the word "short" because there was some initial misunderstanding. It was never proposed that the measure should apply to long vacations. The benefits will be removed in short vacations. Support is provided in the grant for short vacations. That points to the fact that students are indeed students at such times, and not unemployed people.
We know that many students have course work to do in short vacations. They may even have to get their tutors' permission to do any paid work. In future, we shall treat them as being on their courses for the whole of the grant-aided period. There is also an administrative consideration. I think the House knows that we are in the somewhat absurd position whereby it costs £1 to deliver every £3 of unemployment benefit. The position is even more absurd with supplementary benefit when small sums of money are often involved.
Secondly, housing benefit will be removed for halls of residence. In general, hall fees need not be as high as private rents since the aim is simply to cover their costs. Therefore, we see no justification for bolstering hall fees via a kind of alternative housing benefit subsidy, especially since that entails wholly disproportionate administrative costs in which £5 of benefit paid out costs £3 to administer. I stress that there is one significant, and I hope helpful, modification to the proposal concerning halls of residence in that the exclusion will not apply where the education institutions are acting simply as intermediaries between students and private landlords. Using the jargon of the trade, the problem is known as head leases. I pay tribute to my hon. Friend the Member for Oxford, West and Abingdon (Mr. Patten) for the part he played in bringing the problem to our attention.
Thirdly, students' income will be averaged across the whole grant-aided period, instead of them being treated as having different amounts of grant available in the term time and in short vacations. That logical proposal has been widely welcomed. It is, again, something which is sensible not least for its administrative advantages. The change will


prevent the need for local authorities to undertake up to six reassessments of housing benefit and will help to reduce delays in processing claims both for students and other claimants, especially those in university towns.
Fourthly, the regulations will restore our policy on the treatment of students' income from deeds of covenant. Some hon. Members will be aware, especially those representing university towns, that a commissioners' decision last year led to a position in which students would have had the parental contribution to the grant taken into account during the summer, which the grant is not intended to cover. As soon as that came to my notice during last year's summer parliamentary recess, I initiated urgent extra-statutory action to overcome the injustice involved. Since then, we have made extra-statutory payments to prevent losses to individual students.
The regulations will restore our policy that the assessed contribution to the grant should not be taken into account outside the grant-aided period. Should a parent choose to be generous and give his student son or daughter covenanted money in excess of the contribution to the grant, we shall take the excess into account over 52 weeks, subject to the usual disregard.
Those are the four social security proposals from the original package that are going ahead, broadly as originally proposed, but with some modification. Alongside those proposals, we are proceeding with the extension of the students' dependants' hardship scheme to cover two-parent families as well as single-parent families for the full year which is the position at present.
We shall continue to make two changes contained in the original package a year later than we originally intended. One concerns the proposal that housing benefit should no longer be payable to students who take accommodation specifically to study and then leave it empty in the long vacation for more than a brief period. We have made no secret of our view that it cannot be right that housing benefit should pay large numbers of students for accommodation in which they do not live—perhaps for over three months. The measure does not affect accommodation in which students actually live. It only affects accommodation in which they do not live.

Mr. David Alton: What happens to property which is not occupied by students during the summer? Is it relet to someone else? Does the hon. Gentleman understand that enormous turmoil is caused in a student's life when he returns at the end of a vacation and someone else has taken the property?

Mr. Newton: Historically, students have managed to overcome the problem. It is only in recent years that students have received housing benefit on any significant scale. I acknowledge, in part, the point that the hon. Gentleman made. That is why the proposal was deferred. Our original intention was to implement it effectively from this month. We have deferred that until next year, because we have listened to the view that to have introduced the change this summer would have caused undue difficulty for students who would already have entered into commitments for the current year. To ease the problem, we deferred the proposal for a full year, until the long summer vacation of 1987.
It seemed right to us to defer the proposed improvement in the disregards for housing benefit — a disregard of the amounts in the grant for books and

travelling costs. It must be right to bring housing benefit in line with supplementary benefit. That is what we intend to do. That is a helpful move. Alongside the deferment of the measure to which I have just referred, we are also deferring the proposal until the academic year 1987–88.
Apart from deferring the long vacation changes until next year, we propose to make a concession which will modify the effects of the proposal for existing non-grant-aided students. Those who do not live in their parents' home but have to rent accommodation are clearly the most vulnerable group. One effect of the fact that the regulations treat all students in the same way would have been a reduction in housing benefit entitlement for non-grant-aided students. To protect those already on their courses, who would have made certain assumptions about their income and the benefit they were likely to get, we shall allow them to carry on claiming on the same basis as before, so that they do not lose benefit. That concession will last until April 1988 and the introduction of the new housing benefit scheme. By that time, we expect that the vast majority of non-grant-aided students will have finished or be about to finish their courses.
Those are the two proposals which we have deferred rather than dropped.
Lastly, there is one proposal which we have withdrawn. It would have changed the method of calculating housing benefit for students, and would have taken the grant accommodation element fully into account instead of only partially. Although this can be seen as doing no more than putting students on the same footing as other claimants, it was clearly felt in the consulation process that it could cause disproportionate difficulty, perhaps particularly in London. We have, therefore, withdrawn that proposal. I think that is widely seen to have been an appropriate action.
On a number of occasions, when my right hon. Friend the Secretary of State made his statement and since, hon. Members have made it clear that they wish to know what the practical effects will be for students. More than 400,000 in all will be affected, and we estimate that some 140,000 of them will gain the full value of the £36 increase in the grant for students living away from home. The effect on the rest will vary, depending on their particular circumstances. I reaffirm what my right hon. Friend said at the time of his statement, that it is not possible to make generalisations beyond the 140,000 about the numbers and levels of the losses because students' circumstances vary so much, especially their housing benefit entitlements. Some students will gain less than £36; some will come out with more or less a neutral effect; and some will have a measure of reduced entitlement overall. Taken as a whole, it is now widely accepted that our proposed steps are a sensible move to simplify and rationalise the present system and to remove some of the worst anomalies and complications, while making some contribution towards the longer-term aim, which is generally accepted by both sides of the House.

Mr. Alton: The hon. Gentleman has mentioned three times the £36 extra that students will receive. Would he quarrel with the figure put forward by a number of students' organisations that during the eight-week vacation students will lose welfare entitlements worth £309?

Mr. Newton: Without the details of the particular calculation in front of me, it is obviously difficult to


comment in detail, but that cannot be conceivably true of the general number of students affected by these proposals. The precise effect on any given student depends on his particular circumstances. It will vary according to those circumstances. For example, a student whose only benefit entitlement is a modest amount of supplementary benefit in the short vacations would not suffer a loss on anything like that scale. It would obviously be much tidier and neater for me if I could generalise. Points of the kind which the hon. Member for Liverpool, Mossley Hill (Mr. Alton) has reported were made in other quarters simply cannot be made to stand up as generalisations. It is grossly misleading to suggest that that represents the general pattern of the effect on students of these proposals.

Mr. Nick Raynsford: Given the Minister's reticence in giving us figures on the impact of these changes on students, will he at least inform us of the number of students currently receiving housing benefit in respect of halls of residence who will cease to be eligible to receive that benefit as a result of his proposed changes?

Mr. Newton: From memory — I shall ask my hon. Friend the Under-Secretary of State to correct this later if I am wrong — about 80,000 students are receiving housing benefit in halls of residence. I want to emphasise that most of the amounts are very small.
The student benefit regulations represent a sensible, limited step towards simplification and rationalisation and towards removal of anomalies. They are a step in the appropriate long-term direction and I commend them to the House.
I come now to the other set of regulations concerning board and lodging. Although their main subject is board and lodging, I should make it clear that the new regulations also cover a change announced by my right hon. Friend the Secretary of State in his uprating statement in February. The Supplementary Benefit (Requirements and Resources) Amendment Regulations make provision for changes in non-householder contribution and non-dependant deductions made from supplementary benefit. From 28 July no new awards of the non-householder contribution will be made to non-householders aged 21 to 24. Equally, no deductions will be made from the householder's supplementary benefit or housing benefit in respect of such non-dependants in that age group, so the poorest householders will therefore remain fully protected. This change is consistent with bringing the current supplementary benefit scheme into line with the proposed income support arrangements. The regulations provide only for changes in the supplementary benefit provisions. Regulations providing for changes in non-dependant deductions from housing benefit will be made shortly.
I come now to the main purpose of these regulations which concerns the board and lodging limits, both financial and other. As the House is aware, the draft regulations give effect to the outcome of the Government's proposed review of the financial limits from 28 July, the date of the supplementary benefit uprating. As I said in my statement on 18 June, we undertook to monitor carefully the operation of the revised arrangements introduced last year. We have now placed in the Library copies of the extensive—I might almost say voluminous—monitoring

and statistical surveys which have been undertaken by us or for us, including the report by the consultants Ernst and Whinney on residential and nursing homes.
As I told the House on 18 June in respect of our concern about the growth in ordinary board and lodging payments, our latest figures show that the position at the time we acted was significantly worse than we had realised even then. In 1984, expenditure on ordinary board and lodging rose not to £380 million, as we thought earlier, but to more than £500 million, representing an increase of no less than 80 per cent. in a single year. At the same time, there was a 45 per cent. increase in the number of boarders, to more than 160,000.
As I said at the time of my statement, our monitoring fully confirms the existence of the accommodation market, heavily influenced by the available benefit rather than by normal commercial considerations, with widespread advertising to attract payments. In the light of our concern and the outcome of the monitoring, the House will be aware that one thing these regulations do not include is a general increase in the financial limits for ordinary board and lodging or in the related meals allowance. On our evidence, we did not believe that such increases were justified at the present time, and we felt that the evidence showed no case either for an increase in the hostel limits.
There is, however, one change in the shape of the regulations to which I should draw attention. We have taken the opportunity to incorporate in the regulations the main details of the ordinary board and lodging areas, the financial limits and the time limits by including them as a schedule. A number of representations were made to us that this would be more convenient than having them available only in a separate HMSO booklet, although that separate booklet containing maps and details of relevant DHSS local offices will continue to be available for the convenience of those who prefer to have it in that form.
There are two principal changes in the regulations in relation to ordinary board and lodging. The first is relatively limited and important and the other is of perhaps rather wider significance. The first is, of course, our decision that the ordinary board and lodging limit for couples without young children, which is currently one and three quarter times the single adult limit, should be increased to twice the single limit to avoid some of the difficulties about which representations were made to us. I hope that that will be thought helpful. The other, which has certainly gained wider notice and is of much greater general significance, is that the regulations incorporate the necessary provisions to prevent time limits being reapplied to claimants who were in board and lodging before November 1985, as had been intended on 28 July 1986.
The new regulations extend indefinitely the exemption that operated until 28 July 1986, which was included in the previous regulations, for those being paid as boarders on 24 November 1985. New boarders aged under 26 will continue to be subject to the existing time limits unless they come within the extensive range of exemption categories designed to protect those in need of board and lodging.
The limits for residential care and nursing homes were the subject of a good deal of that monitoring and research, including the study by Ernst and Whinney to which I have already referred. Following the significant increases of £10 a week in the residential care limits and £31.40 a week in the nursing home limits in November 1985, the evidence


is that, in general, the average costs in homes fall within the benefit limits and in several categories it falls well within.
As I said to the House on 18 June, we concluded that no general increase in those limits was justified, but, on looking at the point at which the fit was tightest, if I may put it that way, we felt that there was a reasonable case for some further increase in the residential care limit for the elderly. Therefore, the regulations incorporate a further increase of £5 in that limit from £120 to £125, which makes a total increase of some £15 a week in just over a year. I should emphasise that the ordinary residential care home for the elderly caters for by far the largest number of claimants in homes.
Apart from that, on the evidence that had come to us, we felt that the appropriate course was to concentrate on some more specific problems that had emerged. I should like to pay tribute to the work of a number of groups within and outside the House — the Social Security Advisory Committee, the all-party group on social services, ably chaired by my hon. Friend the Member for Mid-Kent (Mr. Rowe), and the National Council for Voluntary Organisations which, among other things, held a useful conference a few weeks ago which I was able to attend. Having listened and sought to respond to the representations that had come from those and other quarters, we felt it particularly important to make some improvement in the limits for those very dependent elderly people in residential care homes, for whom there are clearly additional costs. For elderly people in residential care homes who are very dependent and who are, in most cases, at present limited to £120 a week we have put a new limit of £140 a week in the regulations where they qualify for the higher rate of attendance allowance, which seems to be the best available indicator of the degree of dependence which is the cause of concern.

Mr. Harry Greenway: I have a smallish number of constituents whose income from all sources, including the benefits that my hon. Friend has been discussing, does not quite match the charges of the home in which they are staying. That must be common across the land. I should be grateful for some sort of slightly more elastic procedure whereby there can be some adjudication process between what is available to the resident and the charge of the owner of the home so that some means of producing a match can be achieved. Perhaps it cannot be done. Perhaps the proprietor must be told that no more money is available. However, maybe the charge is legitimate and some more money should be made available somehow. Can anything be done?

Mr. Newton: I understand and appreciate my hon. Friend's concern in this matter. I should like to make two comments. The first is that the proposals I was outlining to the House are clearly and specifically designed to introduce a greater degree of flexibility into the limits to meet the sort of problem my hon. Friend has in mind. The second is that, as some hon. Members who are present will know, we have been actively pursuing discussions with the local authority associations through two working parties to see whether we can move towards a system in which there can be more individual assessment in relation to the needs of an individual claimant and in relation to the costs and charges of individual voluntary or private homes. Clearly the expertise involved in operating such a system

significantly resides in local authority social services departments rather than in local DHSS benefit offices. That is why we have put so much emphasis on seeking to develop and carry forward this endeavour to work more closely with the local authority associations. We are actively seeking to pursue that and I can only hope, as my hon. Friend the Member for Ealing, North (Mr. Greenway) hopes, that it will bear fruit.
As part of that effort to work more closely with the local authority associations we are intending later this year to mount some pilot studies to test possible assessment procedures within that sort of framework. Although I cannot give my hon. Friend the Member for Ealing, North immediate satisfaction, I hope that he will accept that we recognise the importance of the point he has raised, and, far from being one we are ignoring or neglecting, we are actively exploring whether it is possible to move closer to the sort of policy which my hon. Friend has said he would like to see.
I have referred to the severely dependent elderly in ordinary residential care homes and our concern to give additional help to them through the device involving the use of attendance allowance as an indicator of the need for a somewhat greater payment. We are putting forward in the regulations similar proposals in respect of those who are blind, especially those who became blind in old age, but are in ordinary residential care homes. There, too, we are proposing a new limit of £140 for blind people over pensionable age where it is more advantageous than their present limit.
The other significant change, which I outlined in my statement and which is contained in the regulations, is the introduction of, effectively, a higher limit for residential care and nursing homes in London. Since my hon. Friend the Member for Ealing, North counts as being within Greater London, I hope that this will be of some help to him. We are proposing to increase the limits by a special extension of up to £17·50 a week. As I said to the House on 18 June, when taken altogether these proposals would mean, for example, that a severely disabled or a blind elderly person in a residential care home in Greater London could get extra help of up to £37·50 a week. That is a significant improvement.
One of the other concerns that emerged from our work and from the representations made to us by many hon. Members was about claimants who entered residential care or nursing homes before April 1985 when the revised structure of limits was introduced. We made what the Social Security Advisory Committee called generous transitional arrangements ensuring that benefit continued at protected levels, in most cases for life. We are now proposing, exceptionally in terms of the conventions that normally govern transitional protection, an addition of up to £10 a week above the protected rate for those transitionally protected at July who have had no extra help towards fees increases since April 1985. That has undoubtedly been welcomed by both sides of the House. There is another provision that has undoubtedly been welcomed, in respect of which I pay a special compliment to my hon. Friend the Parliamentary Under-Secretary of State who took a particular interest in it. We are proposing new provisions to help meet retaining fees for those who are away from home for a short period such as a holiday with their family.
Apart from those main changes, the regulations contain some clarificatory amendments of a beneficial nature, and


change to restore the original policy intention concerning the treatment of attendance allowance in relation to the transitional protection provision.
As I said in response to the intervention of my hon. Friend the Member for Ealing, North, the regulations, with the specific and well-targeted changes that we have proposed, introduce greater flexibility, which is welcome, while maintaining a firm framework for that part of the benefit system, which is undoubtedly needed. The regulations as a whole rest on our determination to see that help is given as effectively as possible to the many people who need such help, but in a way that can be justified as compatible with the sensible administration of the benefit system as a whole. I believe that what we have proposed has been widely welcomed, and I commend the regulations to the House.

5 pm

Mr. Michael Meacher: On one point at least, I am glad to say, the Minister and I are agreed. That is that there should be a single channel of support for students, and that that channel should operate through the education rather than the social security system. However, that is about as far as agreement can readily go, because beyond that point the story of how that principle is being applied by the Government has been one of muddle and mishandling. It is our strong contention that, despite the Government's concessions, they are still far from getting it right.
The Rowe report on housing benefit and the Social Security Advisory Committee both insisted that a complete overhaul of the student grant system was necessary before benefit could be withdrawn from students. That fundamental principle is still being breached by the Government. Indeed, neither the Secretary of State, when he made his statement on 18 June, nor the Minister for Social Security today has answered the basic question why it is necessary to make changes, except, perhaps, for those involving short-term vacation claims, in advance of the new review of student support.
In effect, students are being asked to take losses in benefit now in exchange for some vague, uncertain IOU, cashable at some unspecified time in the future. For students this summer, the question is not so much whether they would buy a second-hand car from the Government as whether they would part with money for a third-hand review of student grants—not a very enticing prospect in view of the aborting of the first two.
Secondly, we question whether it is warranted to carry through that upheaval when it will now produce such relatively small savings while generating major inequities among students. The original proposals would have saved about £40 million to £45 million gross, according to the Government. That is before the compensating increase in student grants and housing benefit disregards. The net figure, after compensation, is £20 million to £25 million. It is now stated by the Secretary of State that the "overall saving"—that was his phrase—will be £8–5 million this financial year and £16 million next year. Presumably that includes the extra expenditure on grants and disregards. If not, the savings would be piffling and not worth all the confusion. Even if those savings are net of the extra

expenditure, the gain to the Government is still small and is certainly obtained at disproportionate cost in increased hardship to students.
The SSAC concluded in paragraph 64 of its statement:
While students paying the highest rents—and London-based students in particular—will sustain significant losses, up to 140,000 students will receive a windfall of £36 unrelated to their needs.
The SSAC goes on in paragraph 65:
The proposal to switch some of the specifically targeted benefit savings to an indiscriminate increase in student grants does not, in our view, make sense, and would produce major inequity within the student population.
Our third major objection is that, even despite the concessions that the Government have made, the cuts that are retained, especially those on halls of residence and unoccupied property in the long vacation, remain unfair. I accept that the Government have adopted, in their statement on the SSAC report, a number of the protective measures suggested by the SSAC for the so-called "problem groups"—not a happy phrase. Examples are transitional protection for students without awards, head leasing—I did not know what that meant until I read that paragraph—of accommodation and short absences during the summer vacation. Nevertheless, there remains a core of inequity in the cuts on which the Government are still insisting.
The Government still intend to withdraw housing benefit for students in halls of residence, without compensation, as the Minister made clear today. The SSAC recommended that that was warrantable only on the basis of three conditions. I quote paragraph 41 of the SSAC's report:
We recommend that the funds currently devoted to housing benefit for students in halls of residence should be transferred to the University Grants Committee and used to subsidise university accommodation; the Government should consider the problems of vacation occupancy; and steps should be taken to ensure that only halls of residence and similar accommodation and not other types of tenancy are
The Government's answer to those points, such as it is, is partial and unconvincing. The Minister hardly touched on it today. One feels when one reads the answer that the Government, having retreated a little, for which we are grateful, are still determined to have their pound of flesh, whatever the logic. That retained cut is one of the victims of that determination.
Another example is the retained housing benefit exclusion from unoccupied property in the long vacation. In paragraph 47 of its report, the SSAC said:
we are seriously concerned about the possible short-term effects of the proposed change. Even if the student housing market responds in the desired manner students may suffer stress and hardship during the period of transition. We suggest that the results of the change should be monitored carefully so that if there is evidence of serious hardship appropriate steps can he taken.
The Government argue that by deferring the change for a year they are meeting the SSAC's objection. They are not. The same problems of uncertainty, confusion and loss will simply recur, but a year later.
More generally, the SSAC argues that students have little choice in their housing. The growth in student numbers has not been matched, in general, by the growth in the provision of university accommodation. Moreover, it is true that students are forced to compete at a considerable disadvantage in a shrinking private rented sector. They require only a short tenancy and they possess fairly low income, in general. Therefore, the effect of the regulations where there is a shortage of accommodation — I take the point made by the hon. Member for


Liverpool, Mossley Hill Mr. Alton)—will be to force students to take a 12-months lease without housing benefit cover for the summer months. That is the only way in which they can protect their housing when there is a shortage. That is scarcely fair or right. Like the iniquitous 20 per cent. cut in housing benefit for supplementary benefit claimants in the Social Security Bill, which is now rightly being struck out in another place, that is a straightforward, downright cut in benefit for which the Government have provided no adequate justification. For that reason, it remains as objectionable today as it was when the Government first announced it in December.
The Minister seemed coy about his mathematics on the housing benefit cuts. He said that 400,000 students will be affected, of whom 140,000 will gain. My arithmetic suggests that about 260,000 will be either in the same position or will lose. If he wishes to clarify that, I should be grateful.

Mr. Newton: I offer only a modest qualification. There is the possibility — I cannot put numbers on it — that some people who receive less than £36 a year in social security benefits, which may include those small sums charged by some halls of residence, will also be net gainers.

Mr. Meacher: Are they included in the 140,000 who will gain or will they be in addition to that?

Mr. Newton: The 140,000 are those whom we estimate to be living away from home but not receiving any social security benefits. Therefore, they will gain overall by the full extent of the £36 grant increase

Mr. Meacher: I understand that point. However, it would be a reasonable generalisation to assume that from 200,000 to 250,000 will lose, albeit some by only fairly small amounts.
What makes the housing benefit cuts all the more objectionable in principle is that, contrary to the Government's protestations that they are simply transferring support from social security to the education system, they are cutting both. We have been told that, even after concessions, the housing benefit cuts for students will amount to about £16 million in a full year. On the other side of the coin, student grants have fallen in real value by 20 per cent. while the Government have been in office. In terms of the current grant, that is a cut of £360 in purchasing power today compared with seven years ago.
I repeat that, although we accept in principle a transfer to a single channel of support via the education system, that is not what is proposed in the orders. The orders will bring about major cuts in housing benefit on top of the major cuts in the real value of the grant that have already occurred. To make, as Ministers have, meretricious noises about the possible conclusion of a future review of educational support which reopens the prospect of student loans is scarcely reassuring and does not begin to compensate for the reality of financial losses for students across a wide spectrum.
The other issue in today's batch of orders is the unrelated issue — I am not sure why they were all thrown together — of board and lodging. My hon. Friend the Member for Derby, South (Mrs. Beckett) will concentrate on that when she replies, but I wish to make a few general observations in the light of the new information available from the social security policy

inspectorate surveys. I appreciate that they are voluminous, but they are also informative and I am glad that we have that information.
Perhaps the most significant finding from the inspectorate's interviews with 272 board and lodging claimants, in what it says is a representative sample of areas, is that one third of claimants pay a board and lodging charge which exceeds the financial limit laid down by the DHSS. The amount by which the supplementary benefit fell short of their accommodation costs varied from a few pence to no less than £45 a week. Leaving aside those two extremes, it is especially disturbing that one in eight of all board and lodging claimants was paid as much as £10 to £25 a week less than his accommodation cost. If the sample is representative, as we are told it is, that must reflect the experience of between 12,000 and 13,000 claimants today. That shows that in a significant minority of cases, the board and lodging regulations are still producing serious hardships.
Of the claimants whose supplementary benefit did not cover their accommodation costs, one third told the DHSS inspectorate that they could stay in the lodgings only by meeting the excess charge out of their meals allowance, personal expenses or, in a few cases, their savings. In addition, as many as one in eight said that they were in arrears with the payment of board and lodging payments to their landlords and that the arrears ranged from £10 to £400. Furthermore, others in the sample have already been forced to leave their accommodation because they were in arrears. That is a serious and worrying problem.
Another worrying finding which emerges from this material is that, contrary to the Government's complacent belief that landlords would rapidly adjust their board and lodging charges to the new financial limits, it appears that the opposite has happened in almost as many cases. The policy inspectorate found that, although 8 per cent had their board and lodging charges reduced by between £5 and £30 a week, 6 per cent.—nearly as many—had them increased by similar amounts.
There is evidence that Ministers' claims about the extent of available accommodation which is within the financial limits is either exaggerated or fanciful. I see from today's copy of The Guardian—I do not know whether the Minister will wish to deny that it is his favourite newspaper —that the Minister rejected a claim by
the Central London Social Security Advisory Forum … that 90 per cent. of over 700 hotels in London charged more than the DHSS limit.
That point was made in another context by the hon. Member for Ealing, North (Mr. Greenway). The Minister claimed that his officials have located at least 20 cheap hotels that are within the limit. When the forum checked his list, it discovered that the Minister's claim was not substantiated in three quarters of the cases. I hope that the Minister will accept the validity of the serious comments made by the forum that almost all hotels in London now charge above the DHSS limit.

Mr. Newton: I intervene simply to say that, as a result of some discrepancies between the way in which the details were put in the CLSSAF's document and our report of this dipstick survey, there was an overlap of four or five cases. Nevertheless, our small survey—there was also a wider survey—showed 14 to 15 additional hotels. I emphasise that that was just the result of DHSS officials telephoning, on a one-off basis, in response to some advertisements that they found in the local newspapers. There is no attempt to


suggest that the 20 hotels formed a great, comprehensive survey, simply that DHSS officials picked out 20 advertisements, telephoned and identified — we can haggle about the exact figures—14 or 15 of which were not within the limits. While we are on this track, I should say that one further address, which was said to be unobtainable despite continuous ringing, was contacted by my officials at 9 am today and it was confirmed that the accommodation was within the limit.

Mr. Meacher: The Minister is a little less genuinely contrite than he normally is. I accept his latter point as that reflects one case. The truth is that, of the other 14 or 15 hotels, six were already on the list. I accept that those 20 hotels were taken at random, but the randomness makes it significant. Two more hotels were unobtainable —although the Minister now says that one is obtainable—one would not take claimants and four would take people within the DHSS limits only at three to a room. To suggest that that is readily available accommodation for unemployed, homeless people is a disgrace. One hotel had no telephone number or full address, so it would be difficult for claimants to contact. That left five which were correct. I accept that perhaps there are six. Out of the Minister's random list, only six out of 20 were available. The forum admitted that 10 per cent. were available within the limits, but that means that roughly 90 per cent. are not.

Mr. Raynsford: Will my hon. Friend confirm that, compared with the random sample of 20 hotels from which the DHSS drew its conclusions, the survey of the Central London Social Security Advisers Forum and other voluntary organisations was based on a sample of 710 hotels and might therefore be expected to give a more representative picture of what is happening in London?

Mr. Meacher: I am getting in the way of a significant dialogue. Perhaps the Minister wishes to intervene, because my hon. Friend's question was directed more at him than at me.

Mr. Newton: I am prepared to be a little contrite if the CLSSAF or the housing advisory service feel that I have been unfair to them—I have considerable respect for the activities of both, and was not seeking to attack them—but I merely question whether their list is as comprehensive and up-to-date as they claim.
I make it clear that to call the smaller of the DHSS's samples a random survey is to over-dignify it. An adventurous DHSS official simply thought that he would see what would happen if he picked out 20 hotels and telephoned them.
We also conducted a more properly structured sample survey which showed that, in addition to those reported by pressure groups, more than 350 boarding establishments in London were within the limits. Unfortunately, we cannot pass the details of the hotels in our sample to the pressure groups because, in common with other such survey information, we do not have the permission of those included in the sample to do so. By definition, the information given in the smaller survey was publicly available as my Department simply responded to advertisements in newspapers.

Mr. Meacher: I am grateful to have regained my speech. I thought that the Minister was about to make a second speech.
The key point is not the status of the 20 hotels that were telephoned; it is that an overwhelming number of hotels in London which provide bed and breakfast accommodation are charging significantly more for it than the DHSS financial limits provide. That fact is based on a detailed and comprehensive survey.
If the Minister wishes to challenge that fact he should produce detailed information and present it formally. Until that happens, the position in central London is as I have described and it is grossly unfair to subject homeless unemployed people to it. Simply providing sufficient money for their landlords will cut into the rest of their allowances. That is all that we are saying, but we are saying it strongly.
Another disturbing conclusion drawn by the policy inspectorate was that the overwhelming majority of boarders, including those in private households, have no alternative accommodation. One in seven of them could find some temporary accommodation, mostly with parents or relatives, but only one in 25 had access to alternative permanent accommodation.
That fact decisively rebuts one of the Minister's key arguments: that young people were leaving home unnecessarily to live in board and lodging accommodation. The main reasons revealed as to why those people became boarders were disputes with parents or relatives, the break-up of their marriages, or being forced to leave their previous accommodation. That shows clearly that they are simply people who have nowhere else to go.
That background calls into question the purpose of the board and lodging regulations. Are they designed simply to save money or to pressurise people into moving on to find jobs? If the latter, the board and lodging regulations have been a failure.
A DHSS document published last month, entitled "Monitoring the Impact of the 1985 Changes", stated:"
There was no evidence to suggest significant moving between board and lodging areas.
More explicitly, the evidence shows that the number of people who cease to claim supplementary benefit because they have found work is tiny. To that extent, it has not been a job-finding exercise. The Opposition are not surprised because no jobs are available.
If the purpose of the board and lodging regulations is to save money, two other questions immediately arise. Is it reasonable to save money at the expense of people who have been forced by personal misfortune into board and lodging accommodation because they have nowhere else to go, and who are then forced to cut food or other essentials to pay the accommodation charge? Even more importantly, is it fair to penalise the homeless unemployed in general when they are hapless victims of policies beyond their control which have led to soaring youth unemployment and almost the collapse of the local authority house building programme?
Since we believe that the answer to both those questions is a resounding no, we continue to oppose the principle of the board and lodging regulations. At the same time we strongly oppose, and shall certainly vote against, the major cuts in housing benefit for students, which are matched by inadequate grant compensation and aggravated by the huge fall in the real value of student grants under this Government.

Mr. Robert McCrindle: As a fairly frequent participant in debates on social security, I have listened to the hon. Member for Oldham, West (Mr. Meacher) many times. I am always struck by the stridency that he seems to bring to debates on social security. I pay him the tribute of equating that with a deep-seated opposition to whatever may be before the House at that moment.
This afternoon I was struck by the low level of stridency in the hon. Gentleman's speech. On some occasions, he has been guilty of detaining the House overlong, but on this occasion he managed to make his point in no more than 24 minutes, which is probably a record for him. From that the hon. Gentleman's opposition to the regulations, against which he will vote, is somewhat less than he would have had the House believe. The Government can take some comfort from the knowledge that, although there will be opposition, they should not become over-excited about it.
The hon. Gentleman returned to form by quoting extensively from The Guardian. Sometimes I think that, if that were not his principal source of information, his speeches would be appreciably shorter, if not non-existent. Some Conservative Members treat what is said in The Guardian with considerable interest, if also with a touch of circumspection. We read it avidly to establish the extremity of the position from which we can work back to the true facts.
I extend a general welcome to the regulations. I appreciate the fact that the Minister is prepared to listen to reasonable objections, whether from the Government Benches, the Opposition or from outside interests. There is no doubt that the regulations are much more acceptable to many Conservative Members than would have been the case had the Minister proceeded with his original intention. While listening to the difficulties that may have been encountered had we proceeded as intended, he kept in mind the balance which any Minister in his position must keep before him—that is the balance between the taxpayer, who has to pay the bill, and the beneficiary, to whom one wishes to extend all possible consideration.
I have had the temerity to press the view upon my hon. Friend the Minister of State when we have discussed these matters that housing benefits—a relatively new system of social security — were never intended to prop up students in the way that has become familiar in the recent past. I welcomed the introduction of housing benefits and I continue to believe that they make a major contribution to our social security system. I do not believe, however, that they are structured in such a way as to be able to provide for students the type of assistance which they can reasonably be expected to provide for others in rented accommodation. Having taken that line, I have been pressing on my hon. Friend and my right hon. Friend the Secretary of State for some time that it is correct to phase out the reliance on housing benefits which students have adopted over the past year or two.
I have drawn to the attention of my right hon. and hon. Friends that moving towards a phasing out of housing benefits for students in a year when the student grant increase is being restricted to 2 per cent. could be seen as moving too fast and an attempt to obtain advantage from each direction. There is a strong argument for more phasing and more understanding.
The regulations show that we remain, as my hon. Friend the Minister of State has said, dedicated to moving away from student reliance on housing benefits, but we recognise that the only way in which to proceed is in a progressive fashion. I must welcome what I hope we are about to agree when the Question is put.
This is not the occasion to spend very much time on the wider issue of students' grants or loans. I hope that I shall be forgiven if I say in passing that I have long taken the view that student support — it is sometimes forgotten that it is at a higher level in this country than in most other countries of western Europe or the United States —should be seen as a partnership between the taxpayer, who shoulders a large part of the burden, the parent, who according to his means is asked to make a contribution to the education of his children — in my judgment, he should continue to be asked so to do—and the student himself. I welcome the fact that there is to be an inquiry into student support, no doubt taking account of the social security considerations that we are discussing and exploring.
What have we to fear from an exploration of students" loans? My view, for what it is worth, is to be chary of moving in that direction. There are quite sufficient thoughts in a student's mind without adding to them the matter of his creditworthiness. On the other hand, I do not have a closed mind. If we were able to take forward the partnership between the taxpayer, the parent and the student, that would be a good thing. In the meantime, we must take it that in whichever direction we move, and at whatever pace, housing benefits for students were never designed to achieve the purpose for which progressively they have been used. To that extent, I welcome the fact that the Government have moved in the direction that I prefer.

Mr. Raynsford: The hon. Gentleman will recall that the Government introduced with their housing benefits scheme an entitlement to students in halls of residence to claim the benefits, a right which previously did not exist. There was some logic and reason behind that. We know that housing benefits were designed to reflect the wide differences in housing costs which can apply in different circumstances, unlike other social security payments, that are designed to meet basic needs. If we are to treat students on a par with others, there should he a means of giving them assistance when, through no fault of their own, they have to meet exceptional housing costs. That circumstance continues and the removal of entitlement to claim will lead to hardship.

Mr. McCrindle: I understand that. The only reply which I wish to make immediately is that the housing benefits system is still, in my judgment, far from being effective. We have been taking stock of how the system is working out in practice and introducing such changes as become necessary. In working up to what the final shape of housing benefits should be, it is not surprising that student support should be included within their ambit. I am saying that it would make no sense to have permanently two parallel systems of support for one section of the community. Instead, each section of the community that needs support should rely on housing benefits per se or on a grant system such as the student grant system.

Mr. Raynsford: rose—

Mr. McCrindle: I shall not give way to the hon. Gentleman again. There is a confusion between these systems of support. We have seen the creation of a dual system for students—on this ground they have stood almost alone—and this has flown in the face of the intention behind student grants and housing benefits.
I shall say something about housing benefits more generally before moving on to the issue of board and lodging. I was struck by an early-day motion in the name of the hon. Member for Liverpool, Mossley Hill (Mr. Alton). The motion is headed "Abuses of the Housing Benefit System". It draws attention to the serious concern that is being expressed in some quarters at the "extensive abuse" of the system. It expresses the belief that
a number of private landlords are acting in an unscrupulous and profiteering manner".
It states:
unemployed people are encouraged to apply for tenancies and … landlords subsequently charge extortionate rents well above the levels approved by the rent officer".
That goes somewhat beyond the discussion in which we are engaging this afternoon, but I draw attention to it in passing because it is a fact that that abuse of the housing system is known to have taken place. There is a suspicion that collusion takes place from time to time between beneficary and landlord. To that extent, it seems that we cannot consider board-and-lodging regulations without taking account of the wider operation of the housing benefits system.
We should pay attention to the early-day motion No.1031 which is supported by Liberal, SDP and Labour Members. At the end of the day, we are all taxpayers. I hope that we are all compassionate and that we all wish to direct social benefits to where they are needed. If there are examples that show that that is not happening, the conclusion of the motion — that there should be an inquiry established into these abuses — will have my support.

Mr. Alton: I am grateful to the hon. Gentleman for referring to my early-day motion and for offering his support for the call for a inquiry. Will he support the principle that, wherever rent is being paid directly through the housing benefits system to a claimant, the rent should be registered with the rent officer?

Mr. McCrindle: I am not an expert in this area and I should need some opportunity to study whether that is the best or only way to achieve the objective that probably unites the hon. Gentleman and myself. I hope that he will forgive me if I do not give him an immediate answer off the top of my head. I do not exclude the possibility that his suggestion is the solution.
There is no question in my mind but that a good deal of heartache has been created as a result of the operation of the board-and-lodging regulations. There is equally no doubt that there were abuses of the system which led to the Government feeling that it was necessary to introduce the regulations. In introducing amendments to the regulations, we should be ensuring that genuine social security needs are effectively met, while taking every opportunity to curb the abuses, of which, I suspect, every hon. Member has some first-hand knowledge.
I welcome the Government's decision to increase by a further £5, to £125 a week, the payment to people in residential care homes. I note with approval that there has been an increase of £15 a week overall since April 1985.

That underlines the fact that the Government have clearly listened to the representations made by some of us who felt that £110 a week was cutting it very fine indeed and that, while some homes could survive on that, it would be extremely difficult in some parts of the country.
Mentioning that geographical distinction leads me to make a mild criticism of the Government, and, in the process, to declare an interest. I am pleased to note that, in addition to the overall increase of £15 a week, there is to be a further increase in the London area of £17·50 a week. There can be no doubt that costs in the London area, be they transport or labour costs, are higher, and it is justifiable that the amount paid to residents in homes in the Greater London area should benefit in the way that the Government propose.
However, as the Member of Parliament for the first constituency over the Greater London boundary to the north-east of the city, I shall find it difficult to explain to those who run residential homes in my constituency that, whereas £142·50 is a reasonable figure to pay for a residential home in the London borough of Havering, it is reasonable to pay £17·50 less than that in my constituency. I should have preferred, and I urge the Minister to consider, some form of tapering. It will always be difficult to draw a boundary, but if this payment had been tapered it would have been seen as fairer. My constituents view this as the thin end of the wedge because their costs are not materially different from those of people in Greater London next door.
Having said all that, let me express my appreciation to the Government and to Ministers for having listened to the various representations that have been made. What we are being asked to support this evening is a considerable improvement on the earlier regulations. With the one or two minor qualifications that I have felt it necessary to express, the Government can rest assured that they will have my support in the Lobby tonight.

Mr. David Alton: It is a pleasure to listen to the hon. Member for Brentwood and Ongar (Mr. McCrindle), although I disagree with his ultimate conclusion. I would find it difficult to vote in favour of the regulations tonight because of the qualifications and caveats that I want to enter during my contribution to the debate. I was glad that the hon. Gentleman raised the question of abuses of housing benefits and I shall return to that later.
I endorse what the hon. Gentleman said about student loans. I, too, oppose the introduction of student loans. In reality they are already being introduced by the back door. With the fall in the value of the student grant, by about 20 per cent. in real terms in the past seven years, many students are being forced to go to their bank manager to borrow money. They then find themselves taking large overdrafts which put them into penury for long periods.
The hon. Member for Oldham, West (Mr. Meacher) also talked about the position of students and I concur with everything that he said. The clock is being turned back to before the Education Act 1944, with less and less opportunity, particularly for young people from underprivileged and poorer backgrounds, to enter higher education because of the financial penalties which are involved. Hall fees are one example of that. The Minister talked about that but he failed to mention that between 1979 and now hall fees have gone up by 77 per cent.

Mr. Martin Brandon-Bravo: I hope that the hon. Gentleman will clarify the remarks that he has just made. He seems to be saying that it is the people at the bottom of the income scale who are being denied access to higher education. But surely it is precisely that group who get the full grant. They are not adversely affected. It is the so-called middle-class students who are sometimes in trouble. I hope that the hon. Gentleman will clarify his position.

Mr. Alton: The hon. Gentleman will be aware that whether students come from the poorest background or from the middle hand, to which he has rightly referred, the costs involved in trying to sustain oneself through the vacations, in trying to buy the necessary books and in trying to cope with all the everyday living costs are so enormous that many students are finding it more and more difficult to cope. That has led many young people, for whom it may not be the normal course to go on to higher education, to simply opt out. I see plenty of evidence of that in my constituency.
The Minister said that the proposals that we are considering today are well targeted. I do not agree with that. They are a pot pourri of proposals which attempt to spatchcock together a wholly unsatisfactory package. The Minister mentioned several times during his speech how students will receive a £36 a week increase, but he did not mention what reduction there would be for students who would lose their benefit entitlement during vacations. When I challenged him on that, he was unable to give the House a figure. The National Union of Students estimates that as much as £16 million will he withdrawn from the benefits system. Supplementary benefit and employment benefit will disappear for short vacations. The Minister drew comfort from the fact that that did not apply to the long vacations but I regret that it is happening at all.
From student entitlement to welfare benefits, it is extraordinary that the Department is pre-empting the Department of Education and Science whose Secretary of State said only in the last few days that he wanted to have a longer-term look at student financing. It would have been far better to wait and see what conclusions he arrived at before bringing forward these proposals tonight.
The Government's proposal that students should give up their accommodation during vacations when they will be denied housing places them in an impossible position. They will have to start the search for new accommodation all over again at the end of a vacation. In cities such as my own, a property that is left vacant while a student is away will almost certainly be vandalised and that will cost dearly.

Mr. Nicholas Lyell: What the hon. Gentleman has just said about students having to start again to find new accommodation flies in the face of my experience when I was a student, and, I suspect, when he was a student, when we made arrangements with our landladies which lasted through to the end of the summer term, gave up the accommodation in the interim and then made fresh arrangements from the autumn.
But will the hon. Gentleman comment on a wider point? He says that the provisions will damage the opportunity of poorer students to take part in higher education. How is that consistent with the fact that today 13·8 per cent. of the available group — the highest proportion ever—are already taking part? That does not seem to support his contention.

Mr. Alton: I am not sure where the hon. and learned Member for Mid-Bedfordshire (Mr. Lyell) gets his figures. After 14 years representing people in the inner city of Liverpool, first as a councillor, now as a Member, my experience is that fewer people are availing themselves of the opportunity to go into higher education. More and more people are saying to me that they would find it increasingly difficult if they had around their necks the albatross of loans that they will have to pay back to the banks. They say that the burden of the repayment of those loans would prevent them from going into higher education. It is certainly a major disincentive.
Times are changing. I agree with the hon. and learned Member for Mid-Bedfordshire that in the 1960s it was easy to leave a property that one might take for a brief period and then it could be let to someone else during the vacation. In my city of Liverpool there are currently 6,000 empty public sector properties and 3,000 private sector properties. That is a disgrace. Given that situation, it is unlikely that anyone would take those vacancies which, on the whole, are not in the houses of landladies but are in properties which students tend to rent in groups of two or three. Those properties will be left empty during vacations and I suspect that they will be subjected to vandalism.
These regulations also cover claimants in common lodging houses. The Government are trying to paint far too rosy a picture and to demonstrate that I should like to deal with part of the report by the social security inspectorate. The report shows that of those surveyed 34 per cent. were in bed and breakfast hostels and lodgings while 53 per cent. were in private or local authority accommodation. The most striking feature is that very few of those surveyed had alternative accommodation to which they could go.
Of the 228 claimants who were interviewed, only 12 had access to alternative permanent accommodation and only 43 to temporary accommodation. That bears out what the hon. Member for Oldham, West said in his speech, that there is no route home for many young homeless people who have the misfortune to find themselves in common lodging houses or in hostel accommodation.
I am a trustee of Crisis at Christmas. Several other hon. Members are also trustees of that organisation. It helps fund projects for homeless people, many of whom are young and single. We have found that the situation is getting worse. Many young people arrive in London believing that the streets are paved with jobs. When they arrive they are disappointed because they can find neither a job nor accommodation. 'Many of them have nowhere to which they can return.
Conditions in the common lodging houses and hostels are pretty awful. The House does not have to believe me, because recently in the Reading Evening Post a Government Whip, the hon. Member for Reading, West (Mr. Durant), said:
The main problem is the single persons who are homeless. They have very little hope and some of the bed and breakfast accommodation is appalling. The landlords in some cases treat them badly. In many areas claimants are being forced to pay sums well above the DHSS limit.
In Reading, for instance, it is about 82 per cent. above the limit. In Swansea it is 79 per cent. above the limit, and in Canterbury, Folkestone and Dover it is 75 per cent. above the limit.
There is also the issue of inequitable treatment. It is scandalous that claimants who were caught in the post-November 1985 time warp of DHSS limits receive less than those who applied before the regulations were altered. That is grossly unfair. Despite the fact that the Government are hitting vulnerable people, they will not allow local authorities that have sold off council houses to reinvest that money.
I have no point to make about whether councils should sell houses because that should be a matter for local authorities, but having received money from such sales surely the authorities should have the right to invest that money to provide housing. To prevent councils from using capital receipts for the provision of decent bed and breakfast, hostel or sheltered accommodation for vulnerable people is deplorable.
Next I should like to deal with housing benefits. One aspect of these regulations particularly gives me cause for concern. It is the failure of the Government to insist that any tenant, student or otherwise who is in receipt of housing benefit should automatically have his rent registered with the rent officer. As I said in an intervention during the speech of the hon. Member for Brentwood and Ongar, that is the only way in which widespread abuses involving the loss of millions of pounds of taxpayers' money can be ended.
The Government cannot pretend that the news of the abuses comes as a surprise to them. Ever since the time when housing benefits were introduced Opposition Members have warned that the system was unnecessarily complex, ill-conceived and a potential gold mine for a new generation of Rachman landlords. In July 1982, four years ago this month, I warned the House that housing benefit regulations were:
Byzantine in their complexity and bewildering to the average person.
I said that the schemes were "cumbersome and confusing."
I also said that:
The regulations serve to reinforce poverty, with the poor paying for the even poorer." — [Official Report, 26 July 1982; Vol. 28, c. 784.]
In March 1983 I complained again that the local authorities had not been properly consulted and that private tenants' rights were not being safeguarded. I said that the scheme was half-baked and not capable of being implemented.
Four years after its implementation the housing benefits system has become a nightmare. Government Ministers are being complacent and lethargic about tackling the mess that they have created. I was surprised when on 14 April, in answer to a parliamentary question that I tabled, the Parliamentary Under-Secretary, who I am glad to see in the House, said that no information was available about the number of tenants in receipt of housing benefit whose rents were registered.
Last year some £4·2 billion was paid out in housing benefit and in the year ending 31 March 1986 £4·6 billion had been paid out. Given those figures, the Government's approach seems to be remarkably cavalier. In failing to act they are behaving quite irresponsibly. What happens is that an advertisement will appear in a local newspaper suggesting that bedsits are to let and that people who are unemployed or in receipt of DHSS benefits are welcome to apply. The landlord then gets the tenant to fill in an application for housing benefit. I highlighted in an

example in the early-day motion about which the hon. Member for Brentwood and Ongar spoke the case of a Mr. Caulfield who owns nine properties in a place called Denman drive in Newsham Park, Liverpool.
In one property alone there are 16 different bedsits and from those bedsits the landlord receives some £524 a week in rent and rates. That is claimed back through housing benefit. Of the nine properties that he owns in that road, a total of £ 120,000 a year is being collected through money paid via housing benefit. If those rents had been registered with the rent officer the landlord's entitlement would have been closer to £50,000. That is a rip-off of taxpayers' money.

Mr. Major: I am aware of the case to which the hon. Gentleman refers. I have signed a letter that I hope he will shortly receive about this matter. As the hon. Gentleman knows, the administration of the housing benefits scheme is a matter for local authorities. If he feels that there is abuse, I hope that he will make the details of that abuse available to local authorities so that they may take appropriate action. The review team on housing benefit specifically examined the question whether local authorities should be required to seek registration of rents paid by tenants who receive housing benefit. It concluded, and we accepted its advice, that indiscriminate use of that provision would adversely affect the supply of privately rented accommodation. Neither the hon. Gentleman nor the Government would wish to see that.

Mr. Alton: The Minister is wrong to associate me with the Government's philosophy of trying to create more private rented property. The way that shorthold was introduced and the way that housing benefits have been used are simply devices to try to increase the number of properties in the private sector. I should like to see an increase of rented property through housing co-operatives and housing associations rather than a growth in the number of private landlords.
I disagree with the Minister's final point about the review team and its recommendations. We need to look again at this matter. In the same area of Liverpool that I spoke about a few moments ago there are properties owned by housing associations. They have registered rents of as little as £10 a week. That compares with £35 a week being paid out in housing benefit directly to the private landlord that I mentioned. That discrepancy deserves to be investigated.
The Minister also said that it was the responsibility of the local authority to act and not his. Three parties can ask for rents to be registered. First, there is the tenant, but he has no incentive to do so because, it makes no difference to him what rent is being paid as it is being paid directly over his head. Secondly, there is the landlord, but he obviously has no financial incentive to do that. Thirdly, there is the local authority, but it has neither the financial incentive nor the staff to do so. The Minister was right to say that a local authority could seek registrations, but local authorities throughout the land are not doing so.

Mr. Newton: rose—

Mr. Major: rose—

Mr. Alton: I am delighted to give way to the Ministers.

Mr. Newton: I am sorry about this excessive enthusiasm of Ministers to get at the hon. Gentleman. With the erudition that he is displaying, I must assume that he has


read the social security White Paper and studied the proposals and the proceedings of the Social Security Bill. He will know that among the proposals which have proved somewhat controversial with the local authority associations are those designed precisely to create a greater incentive for local authorities to use their powers. I would welcome an assurance from the hon. Gentleman on behalf of the Liberal party, which has so far shown singularly little enthusiasm for any aspect of the Social Security Bill, that this is one proposal which it will support.

Mr. Alton: I was much impressed by the enthusiasm of the two Ministers, trying to jump to the Dispatch Box at once. It is a case of a two-headed monster, and I assume that their arguments are much the same. But I do not want to be unkind because I am grateful for their enthusiasm.
I cannot give the Minister that assurance because if local authorities are not given the resources required to do the policing job that we should like to see introduced, it would be absolutely impossible for them to ensure that the registrations go ahead. That cannot be done without personnel. If the Minister says that resources will be found for local councils to carry out that job, obviously I shall be happy to give him my support.
I can give the Minister an example from another part of the country because this is not an exclusively Liverpudlian problem. Earlier this week I spoke to Mr. Roy Murphy of Shelter in Manchester. He told me of a bedsit in a condemned property which has a compulsory purchase order on it, for which £65 a week is being charged. That rent is being paid through housing benefit direct to the landlord. On 14 April when I asked the Minister for Housing, Urban Affairs and Construction whether he would introduce new regulations to require local authorities to register rents like this one he simply said no. I hope that the Government will take this issue seriously, study the terms of the early-day motion which I mentioned, and recognise that the problem is a nationwide one.
Another illustration came in a letter I received this morning from a lady in Bolton who said:
Whilst unemployed I moved into a flat in October 1984 … This is a large detached house which has been made into 8 flats and bedsits: on the ground floor there were 3 flats, on the first floor there were 4 bedsits, and on the second floor there was one flat … Outside the kitchen back door was a dilapidated outside toilet. Upstairs on the first floor was the communal bathroom and toilet. The toilet was often in a very unhygienic condition, and the bath had no hot running water … For all this I was charged £30 per week, which the Housing Department was obliged to pay. The landlord's wife (who dealt with the collection of rent) had falsely assured me that the rent had been registered with the Fair Rent Officer.
That pattern is repeated throughout the United Kingdom and it is part of a multi-million pound rip-off.
Homelessness has become a boom industry and housing benefits a licence for landlords to print money. In the face of that, we in the Liberal party believe that the statutory instruments and regulations before us today fail to address themselves to those fundamental issues. Indeed, they make matters worse.
At present 340,000 multi-occupied properties exist in England and Wales, of which 53 per cent. fall below even minimum housing and fire safety standards; 38 per cent. have no proper means of escape from fire; 33 per cent. are in a serious state of disrepair with leaking roofs, severe damp and crumbling walls; 28 per cent. lack essential amenities such as toilets, bathrooms or cookers; and 23

per cent. are wretchedly managed by landlords. Sixteen per cent. of tenants live and sleep in overcrowded conditions, often with no privacy. Some 2 million people live in multi-occupied bedsits, lodgings, hostels and bed and breakfast hotels in England and Wales. Tonight's debate takes little account of their needs. Nothing is being done to end the abuses of existing arrangements, or to tackle those fundamental problems, and for those reasons we shall vote against the Government tonight.

Mr. Nicholas Lyell: None of the Opposition Members who have spoken in the debate has made clear the principles on which they would spend public money in any of these areas. The principles which our Government should follow are that we should set out to help people to help themselves, and to concentrate our state help where it is needed and where it will help people. In my short speech I shall try to apply those principles to three areas under discussion: board and lodgings, the care of the elderly, and student support and the benefits system.
We have seen a phenomenal increase in public expenditure on board and lodgings which is doing nobody any good because the expenditure is benefit-led. Young people move away from home, whether it be London, Bedford or wherever, into board and lodging accommodation in small hotels and hostels, and in rooms from landlords and landladies because they receive large benefits for doing so. Then they do not find a job. Over the past few years the sums spent on board and lodgings have increased from about £50 million a year to £500 million a year. Yet the hon. Member for Oldham, West (Mr. Meacher) said that only one in 28 of such young people find a job when they move from home into bed and breakfast accommodation. What earthly good does it do anybody to encourage young people to leave home and their roots and to go into bed and breakfast accommodation Only to be unemployed, and to waste about £500 million a year in doing so? My right hon. and hon. Friends were right to look at the matter, to call a halt and to ask whether we can direct the money more effectively so that it will assist the young unemployed.

Mr. Raynsford: If I am allowed to speak later, I shall tackle the principle of public expenditure in this area. Is the hon. and learned Gentleman aware of the Department's social security policy inspectorate's report on the reasons why people live in board and lodging accommodation? It reveals that only 2·8 per cent. live in such accommodation because they are financially better off, as opposed to 27 per cent. who are there following a dispute with parents or relatives, 14 per cent. on the breakup of a marriage, 11 per cent. because they are seeking a job and, perhaps, taking the advice to get on their bikes and look for one, and 11 per cent. because they have been evicted and have nowhere else to live.

Mr. Lyell: I can see that the hon. Gentleman has great knowledge in one sense in this area and will be misled by that report. It will be interesting to see how he develops his speech. Whatever answers one receives to that type of questionnaire, the fact is that a young person who comes to London and lives in board and lodging accommodation will be paid about £70 a week. If one is young and not well qualified, one is extremely unlikely to find a job which can possibly substitute or fund that £70 a week. Consequently,


we are kidding our youth. We are giving them a benefit-led opportunity which leads them away from the real chances to better themselves. We ought to be spending this money on better training—I am glad to say that we are, and we all heard the statement today—on improvements and developments in the youth training scheme, on better opportunities for work through the community programme, on teaching people how to present themselves for work in their own areas and on enabling them to release their own energies.
I have seen this happening in Bedford, and we shall hear how it has happened in London. In Bedford, people are taking short-term or long-term bed and breakfast accommodation. If they are unable to find jobs, it is not that there are no jobs available, but that those jobs do not pay a sum that is equivalent to the amount that they formerly received from social security for that kind of board and lodging payment.
The way to tackle the problems of these young people is to help them to help themselves and to release the energies of the individual and the private sector by opening up the inner cities. In many Socialist-controlled areas—I hope that we shall never cease to concentrate on this, and I suspect that it is true of Liverpool, however small the opportunities may be in other respects—if people wish to buy their house or premises for business purposes, or if they wish to do anything in the private sector, they are not allowed to do so. That is true of Southwark. Those local authorities will do anything they possibly can to place difficulties in one's way.
As for long-term care for the elderly, we are seeing a phenomenon that is both encouraging and has warning signals. It is encouraging in that there is a lot of provision for the elderly—a growing section of our society—from the private sector, but we must be careful that it is not benefit-led, in the sense that the benefits made available are so high that people simply go into this as a business for its own sake rather than because there is a demand from elderly people for the particular services.
If we wish to care effectively for our own families and the families of others, we should design the system so that we encourage people to remain in their own homes. We should support those who care for them, and we should provide support, for example, to encourage people to be cared for short-term during holidays while home carers have the rest that they so badly need. We should also encourage the wonderful and new phenomenon that we have seen over the past five years in the hospice movement. That would mean that, having lived out one's life at home with support from the family and the state, properly directed, and having become so feeble and ill, a person could move to a hospice or be cared for at home as in a hospice, and he able to die in dignity.
Those are proper fulfilments of the principles in which we as Conservatives believe. We must be careful not to be led astray, as we undoubtedly have been, by the fact that we are paying people to live in unsuitable places. To some extent we are over-subsidising the development of residential homes, as the Ernst and Whinney report has suggested.
We must concentrate our public moneys on releasing private energies and other private moneys which will not only target themselves much more effectively but also produce far more for the state input involved.
As for student support, I am convinced that the Government are right when they say that it is not proper that those in our higher education system should be encouraged to look either to social security or to housing benefit for their support. We well understand why they do so to some extent at present — because supplementary benefit and housing benefit are available. When we announced that they would not be available, much anxiety was caused, but in most cases that anxiety was quickly allayed when the parents and students realised that for this year at least we would not remove those benefits during the long vacation if the students in question could not obtain work. We made it clear that if they had to keep on such accommodation and live in it during the long vacation, they would continue to get housing benefit.
Once my hon. Friend the Under-Secretary had answered our letters with a number of long and complicated replies—for which I thank him very much indeed — my constituents who had been considerably alarmed had their alarms almost entirely allayed.
My hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo) rightly said that much of the problem of student support comes not from those in the lowest income groups but from the middle income groups from those whose family income is £12,000, £15,000 or £20,000 a year. That income is usually heavily committed, be it on a mortgage, bringing up other children or maintaining a standard of living that cannot easily be adjusted. In those circumstances, an extra £400 or £500 a year can make as much difference as the extra sixpence made to Mr. Micawber. Consequently, the changes that we are bringing about are entirely right in principle, but they must not be brought forward too quickly or unthinkingly in practice. From the responses that we had earlier this year, I believe that the Government are sensitive to those views.
However, on all occasions we should remind ourselves to stick to our principles of helping people to help themselves and of concentrating state help where it is really needed and where it can do most good.

Mr. Nick Raynsford: I regret that the hon. Member for Brentwood and Ongar (Mr. McCrindle) is no longer with us. He referred to the tone of the Opposition and the way in which our criticisms of the Minister were perhaps voiced less stridently than they might have been on previous occasions. The hon. Gentleman drew one conclusion from that, but I draw a different one.
This is the third time in as many weeks that we have debated social security issues. Those who read the Daily Telegraph — which I do not always read — will have noticed that the Minister has not altogether got a good press. Indeed, the sad, heart-wringing story of the poor treatment afforded to Brer Newton last week has undoubtedly influenced Opposition Members to be terribly nice today. However, in no way will that change the strident criticisms that we shall make about the content of these measures.
The first issue on which I wish to speak relates to students. All of us agree in principle that it cannot be sensible in the long term for students to depend on income support, but the House is making a mistake if it concludes that all forms of assistance, including assistance with housing costs, should be treated in the same way.
The point that I tried to make earlier was that one of the reasons for having a housing benefits system is that there are wide variations in housing costs — far wider than in the costs of other things for which income support is designed to apply. The accommodation element contained in the student grant cannot possibly cover the wide variations in costs that students must meet in different circumstances. Those in certain areas or in different tenures or types of accommodation often have to meet housing costs that are two or three times the level that other students have to meet.
Therefore, short of having a very complex grants system that attempts to take these variations into account, it is sensible to allow housing costs—where they exceed the amount provided for in the grant—to qualify for some assistance through a housing benefits scheme. That was my understanding of the reasons for extending housing benefit to cover most students. That was a correct decision, and that is why I regard the Government U-turn on this issue as misconceived.
It is all the more misconceived because it comes, as everyone knows, at a time when students are trying to cope with a grant that has been reduced dramatically in real terms by this Government. The Government have cut away assistance towards housing costs, especially for those meeting high housing costs, while the grant is inadequate; that is grossly unfair to students.
We must consider the Government's justification for doing that. The argument was advanced by the Minister for Social Security that the costs of administering benefits to students were disproportionate to the benefit. Many Opposition Members were surprised to hear that argument advanced on this occasion when we did not hear the same argument advanced with respect to the 20 per cent. of rates contribution which the Government are still —if we believe reports in the press—eager to bring back despite the House of Lords' correct decision that that was an objectionable proposal which should be dropped. In that case, the cost of administering and collecting 20 per cent. of rates was thought by many authorities to exceed the value of the money that would be collected. That is clearly a nonsensical arrangement.
The Government are prepared to stomach that administrative nonsense, yet they are now using the same argument to say that it is not worth paying the benefits to students. The truth is that streamlining the procedure—I welcome the proposal to get away from the need to reassess benefit six times during the academic year by averaging income over the short term and short vacation period—will reduce administration costs and that will result in greater value for money. That is the right and sensible approach. The Government should not deny students benefit on spurious grounds.
We should also be very wary about the argument on the withdrawal of entitlement to benefit in respect of accommodation which students cannot occupy during the summer vacation. Students are often required to continue to pay rent for that accommodation if they want to return to it the following term.
It ill behoves the Government, who have denied students the opportunity to pay retainers, which are generally rather less than the full rent, to have housing benefit on that—which would have been the sensible way to cope with the problem— now to state that the benefit will be removed entirely on the rent elements which have had to be paid by students who want to keep their

accommodation for the following term. That is unfair to students and the fact that the proposal is being postponed for a year does not make it any more justifiable.
The issue of non-householder addition has not attracted much comment so far. However, we must be aware that that represents a further cut. Once again the Minister for Social Security was rather coy about the figures. We have not had many figures from him. When the Under-Secretary of State replies, will he tell us how many claimants aged 21 to 24, who currently receive non-householder additions, will lose that benefit? To be fair in this matter, will he also tell us how many non-dependants in that age bracket, for whom a non-dependant deduction is currently made, will no longer be subject to that deduction? How many will lose benefit and in how many households will there be a compensatory offsetting of the non-dependant deduction?
We should remember that this is not the first time but the third time that there have been adjustments to non-householder additions designed to achieve cuts. The first removed non-householder additions for 16 to 17-year-olds in 1983. The second, two years ago, took them away from 18 to 21-year-olds. And the Government now propose to remove them from 21 to 24-year-olds. These are a series of measures designed to cut expenditure and that is not justifiable.
I would like to focus on the board and lodging issue which has aroused a great deal of anxiety throughout the country. The Government have placed a great deal of emphasis on the increasing cost of payments for board and lodging payments to justify the steps that they have taken. However, they have not looked behind the increase to see why costs have increased. That is where the nub of the problem lies.
The increase in costs simply reflects the fact that there has been a continuing and rapid increase in homelessness under this Government because insufficient homes are available for people to rent at reasonable prices. The problem is not simply an increase in payments to people receiving board and lodging payments from the DHSS. There is a parallel increase in terms of local authorities placing homeless families, to whom they have rehousing responsibilities under what used to be the Housing (Homeless Persons) Act 1977 but which is now covered in the Housing Act 1985, but they cannot provide homes because there are not sufficient homes. The authorities are forced to place people in bed and breakfast hotels.
The two phenomena go hand in hand and are witnesses to the terrible lack of accommodation for people who need rented accommodation at reasonable prices. They are the direct result of Government policies. To be fair, they are not policies originating from the Department of Health and Social Security. These problems are the consequence of decisions taken in the Treasury and the Department of the Environment. These decisions are having a knock-on effect, because increased homelessness and a lack of alternative housing mean that more and more people have to resort to unsatisfactory and grossly expensive bed and breakfast or board and lodging accommodation for lack of an alternative.
The fundamental problem is the growth in homelessness and the lack of alternative accommodation. It does us no service to attempt—as the Government do—to tackle that problem by attacking the symptom. The Government are attacking the cost rather than the cause, which is the shortage of housing. The Government would


have been advised to have considered the advice of the Social Security Advisory Committee which commented succinctly and appropriately on the issue recently. In relation to the Government's first proposal to impose restrictions on board and lodging payments, the committee said:
The assumption that some other form of accommodation is available for young claimants currently in board and lodging accommodation seems to us particularly questionable in the light of the known scarcity of public and private rented accommodation accessible to single people, especially those dependent on social security benefits.
The committee continued:
To a very large extent, we believe a long-term solution has to lie in housing policy, not merely to develop a greater range of accommodation available to single people, whether individually or in shared housing, but also to improve the quality and value for money of existing lodging accommodation.
How true! The Government's advisory committee has hit the nail on the head, yet the Government have not accepted the recommendations.

Mr. Lyell: Would the hon. Gentleman accept or reject the idea—which I support—that the private sector has a real role to play in providing that accommodation?

Mr. Raynsford: I believe that all agencies capable of providing accommodation available to rent at a reasonable price should be encouraged. The experience of the past 80 years is that private landlords have been taking properties off the market because the rate of return from renting is less than they could receive by investing their money elsewhere. There is a fundamental problem. High capital costs are involved and house prices are high in areas such as London. The returns which a landlord would receive from renting to relatively poor people, without receiving massive subsidies, would be insufficient to justify investment of large sums of money in that property. That is why we should consider other sources of accommodation, such as the public sector, housing associations and bodies which have proved themselves able to provide rented housing for people in need.
The problem is therefore fundamentally a housing one. If the Government are looking for savings, they will find it easier to make them by providing new homes to rent through councils and housing associations rather than depending on board and lodging. Ministerial answers over the past six months have stated that it is cheaper for the state to pay for people to occupy new council housing than to pay the vast costs of keeping them in board and lodging. It makes social and economic sense to put people in council housing. Sadly, the Government do not appear to have learned that lesson.
The Government are desperately trying to make savings and they are penalising claimants as a result. I will not examine the Minister's arguments in detail as time is short. After a careful scrutiny of the detailed reports tom which the Minister referred—which are in the House of Commons Library—about the surveys carried out on people in board and lodging, it is abundantly clear that many people are not able to meet the costs of their board and lodging as a result of the Government limits.
According to the Government's own figures, some 47 per cent. of board and lodging charges are above the limit and 34 per cent. are more than £5 above the limit. Those are national figures. In London, to the south of London

and in the south-west, the discrepancy is likely to be far greater. Details are not available in the report, but those are the areas with the largest number of claimants whose board and lodging costs are above the limit.
As a result of Government policies, grotesque overcrowding has developed. Young single people are sharing three or more to a room. Yet the Government have taken no action to attack and improve bad standards. I absolve DHSS Ministers in this regard as it is the responsibility of the Department of the Environment. People have been forced to leave their accommodation and become homeless. I very much regret the Government's failure to recognise that they have made a disastrous mistake. Ministers at the DHSS should withdraw the board and lodging regulations and discuss with their colleagues at the Department of the Environment ways to get a better housing programme going so that people can live in decent homes and have a choice in housing rather than being left in highly unsatisfactory and overcrowded board and lodging accommodation, trying desperately to stay there by sharing because the limits make it impossible for them to meet the costs or, worst of all, forced to become homeless and in some extreme cases driven to suicide by the despair engendered by this grossly unfair and inhumane policy.

Mr. Martin M. Brandon-Bravo: As the House knows, I have a particular interest in student support as Nottingham university, which happily falls in the upper half of the current merit league, and the equally excellent Trent polytechnic mean that our city has many thousands of students. The case for reform in this regard has not been challenged by anyone, even the hon. Member for Fulham (Mr. Raynsford). A proper balance of grants, family contributions, vacation earnings and, I believe, student loans is clearly the right way forward. Our target is therefore to remove the social security element of that support in a reasonably phased manner because the social security system was not basically intended for student support.
In taking that view, I have substantial support within the student body although there is no doubt also much opposition. On the new register, the number of votes in my constituency has leapt upwards by 3,000 persons. I am told that this is due to the registration of students who had not previously bothered to register. Whether their motive is to compliment me in due time on my efforts on their behalf or the reverse, time alone will tell. Having a constituency with a large number of students, however, does not detract from the duty to do what is right. It is all too easy to make electorally convenient noises, but some of us like to be able to sleep with our consciences.
I am sure that no one really challenges the loss of short vacation benefit as there was never any real case for it. As I said in an earlier debate, students who go home for Christmas cannot claim that they are going home to look for work. They go home for Christmas and they have probably earned the break. With regard to the long vacation, I am grateful to my hon. Friend the Minister for allowing time to phase the problem out. Although we are taking something away from students, and there are many of them in my constituency, it seems wrong that they should claim housing benefit for one address while living and claiming supplementary benefit at another address. That simply cannot be right. The hon. Member for


Liverpool, Mossley Hill (Mr. Alton)—sadly, he has left the Chamber—destroyed his own case when he spoke of people paying rent for only nine months and of the risks in the remaining three months. If there are so many empty properties in his city, I cannot believe that the annual rent paid by students is so very high.
As I have said, I believe that I have substantial support from within the student body. Members of the Trent Polytechnic Conservative Association have no reason to tell me what I want to hear just because they are Conservative students. They are perfectly entitled to say what they want as students and I am happy to support them. They firmly believe that Government spending must be kept under tight control, they recognise the link between high public spending and inflation and they are therefore quite content for their support to be discussed in that atmosphere. They recognise, too, that the grants and support for students in this country are better than in any other western nation. Moreover—my hon. Friend the Minister will correct me if I am wrong—I believe that the number of grant-aided students has quadrupled in the past 20 years. So not all students oppose the Government's approach.
I should like briefly to describe the situation of four students. One had no grant and lived on parental contributions, rent rebate, supplementary benefit and—a bloated capitalist! — £80 in building society interest, making a total income of £2,760. After listing all his outgoings, he refers to savings of £160 a year—probably to be generous to me as no doubt that sum is spent on leading the life of Riley. The second student has the £1,800 grant. I do not have time to go through all the expenses listed, but there is £600 left for travel and leisure.
I see my hon. Friend the Whip signalling that I have taken too much time, so I conclude with just one question about the board and lodging proposals which has recently been brought to my attention. I understand that residents in care homes at present receive no supplementary benefit if they leave the residential care home for a short period, for example, for a holiday, but I am told that under the new regulations that benefit will be paid. Perhaps my hon. Friend the Minister will confirm that. On that note, I bring my greatly truncated remarks to an end.

Mrs. Margaret Beckett: This has been an interesting debate. Like my hon. Friend the Member for Fulham (Mr. Raynsford), I was somewhat surprised at the tone adopted by the hon. Member for Brentwood and Ongar (Mr. McCrindle), unusually for him, in his comments on the speech of my hon. Friend the Member for Oldham, West (Mr. Meacher). I understand the hon. Gentleman's wish to welcome the postponement of some of the major effects of the changes, but I was surprised at the extent of that welcome. The hon. Gentleman seemed to imagine that my hon. Friend the Member for Oldham, West had taken most of his observations from The Guardian. Much as I admire that newspaper, I should point out gently to the hon. Member for Brentwood and Ongar that the evidence adduced by my hon. Friend actually came from the large pile of documents accompanying the regulations.
There is no question but that the Minister glossed over the problems that will be caused for students. As so many hon. Members have pointed out, many students will lose substantially and will be forced into debt. Inevitably, this

will be a further discouragement to students from poorer homes and perhaps especially to mature students. A constituent of mine has come to me over the years as the Government have steadily reduced her housing benefit. As a divorced lady with two small children, she has naturally faced increasing problems. She has now taken a great step for one in her circumstances and established herself as a mature student, only to find that the Government are still pursuing her and propose to reduce the benefit entitlement on which some of her financial calculations must have been based. Like so many others, she will no doubt find it hard to agree that the Government's position is justified.
It is especially difficult to justify the Government's refusal to allow students in halls of residence to claim benefit on the ground that the accommodation costs should not be so high in the first place. The National Union of Students would wholeheartedly concur with that view and has, indeed, been urging it on the Minister's colleagues at the Department of Education and Science for a considerable period—only to be told that keeping hall fees artificially low "would not be businesslike".
Perhaps, therefore, in view of the observations that have been made on the purpose of the regulations, the Minister would have a quiet word with his colleagues at the Department of Education and Science and tell them that if they cannot get on speedily with the third review of student grants in recent years they should examine again the charges that students are forced to meet. We hope that this time the review of student grants will be concluded, although presumably it will not be before the general election and certainly not before the regulations come into effect.
As to the board and lodging regulations, again we are dealing with a set of regulations which, as has been said many times in the House, have been from their inception completely discredited. The rationale of the changes is that under 26-year-olds could go home because most of them had left home frivolously anyway because they thought that it would be nice to live in seedy board and lodging accommodation. That seems to have been the argument for imposing the limits on the sums of money that they were allowed to draw. The hon. and learned Member for Mid-Bedfordshire (Mr. Lyell), who sadly is not with us at the moment, seemed not to be aware that students actually pay the money to the landlords in whose premises they live. They are not entitled to use that money to live on the fat of the land.
When the regulations were made, attention was drawn to the fact that they had been drawn up without evidence to support them. The Minister will recall that the Social Security Advisory Committee described such evidence as was quoted as anecdotal at best. The Minister has told us today that the evidence is now available. Certainly it is available in quantity although the quality may be questionable.
When we read the Government's own evidence and any independent evidence it is still not easy to see how it justifies the Government's claims. The Government have quoted some who, in the surveys that were done, indicated that they were satisfied with the accommodation that they were living in and thought that it was good value for money. What comes through clearly is that these people are in a different category from those with whom generally we are concerned when we debate the regulations. They are people who are living in reasonably satisfactory private accommodation. They are not the potentially homeless,


the people who have quarrelled with their parents, the people who have no parents, the people who have been thrown out of their homes or the people who have nowhere else to go. The people who are vulnerable will remain vulnerable to the provisions of the regulations.
The Minister has tried to indicate that the reports that he has laid before the House show that the Government limits are adequate. The reports show that in 58 out of 134 offices where inquiries were made, the staff knew of at least one establishment where charges had, they believed, been reduced since the new reduced limits were introduced by the Government, something that the Government said would happen on a widespread basis. That is not the same as indicating that in the vast majority of cases charges would be reduced, as the Government appeared to imagine would happen.
It also remains a fact, again from the Government's own evidence, that in 76 out of 134 local offices surveyed not one establishment could be found where charges had been reduced. The Government's own evidence shows that about 60,000, or 47 per cent., of those involved have to pay sums that bring them above the Government's limits. Since these charges are and remain frozen, the number must steadily be rising, even though, as has already been quoted in the debate by the hon. Member for Liverpool, Mossley Hill (Mr. Alton) among others, 70 to 80 per cent. of claimants in some areas are paying above the limits as they now stand.
If we consider the independent evidence that is coming forward and do not rely merely on the Government's evidence, the picture is even bleaker. Reference has been made in the debate to the fact that only 60 hotels could be found by an independent survey in London that were below the Government's limits, and that there were vacancies in only 22 of them. We are talking about a potential market of 10,000 claimants, so only a tiny percentage of the people who want accommodation can possibly find it at charges that are below the limit. To keep below the limit in that accommodation, on average four people have to share a room, and in some cases the number expected to share a room is as high as 12.
In Preston an independent survey has been carried out, first covering the bed and breakfast establishments and hotels listed in yellow pages. None of them was within the allowance and only one had ever taken people who were unemployed. The list provided by Preston housing advice centre gave a slightly better picture. All of its accommodation was within the maximum limit, but only one had vacancies. Again at all the establishments residents were expected to share rooms with strangers.
A similar picture emerges from an independent survey in Ipswich where no bed and breakfast accommodation within the cash limits was found and just one that purported to offer full board. Here again it is apparent that in order to meet their bills claimants have to use their meals allowance.
That brings me to the meals allowances themselves. The allowance is not over-generous, being £4·20 per day, and not having been increased for two years. Presumably that means that the Government now think that two years ago the sum of £4·20 was grossly over-generous since they have chosen not to increase it, although in that period not only have the costs of food risen by 12 per cent. but VAT has

been imposed on take-away food, which must mean that the charges that people are expected to meet from the meals allowance have risen considerably.
Of course, we are glad that the Government have decided to allow couples to receive twice the rate of benefit for a single person since that is what landlords have always charged. There at least there is some recognition of reality, but is it still the case that no money is payable towards hotel charges that may be imposed for children under the age of 11 even though in London, for example, every hotel in which charges are below the limit makes a charge for such children?
In relation to under 26-year-olds, I want to draw attention to the implications of the non-householder addition which is being abolished by the regulations. The Government have argued in much of their evidence, and say that the supporting evidence is justification for their view, that people are being allowed to remain in accommodation at reduced payments on the basis that they may draw the non-householder addition. It is not clear from the evidence how justified the Government are in that claim. The surveys may have been carried out shortly after the limits were imposed. If the surveys had been done after a longer period, that might not have been a valid contention.
Even if the Government's contention that people are being allowed to retain the award of the non-householder addition is valid, what do the Government expect to happen when that addition is abolished, as will happen to under 25-year-olds under the regulations? In regard to the limits for board and lodging for bed and breakfast accommodation, the Government have relied on the argument that people can get the non-householder addition and that that will be sufficient. But when they do not get that addition, what do the Government expect them to do—to starve or to turn to crime?
In regard to residential homes, the Ernst and Whinney survey has been drawn on and emphasised by the Government even though it had only a 28 per cent. response rate. What did it cost the Department to obtain a survey of such unparalleled dimensions? Although the survey claimed that the limits that the Government had imposed were adequate, it collected costs at the start of 1985 and compared them with the limits that were established by the end of 1985, by which time the costs had probably risen. There is a rise for London but not for anywhere else because the Ernst and Whinney report says that the response rate was too low.
If limits are completely inadequate elsewhere, the Government do not know because the survey does not tell them. The table of average costs, on which it is claimed that the limits are adequate, is again based on shared rooms despite the fact that the Government's own code of practice advises that residents in such accommodation should preferably have single rooms. Yet when it comes to deciding whether the money is adequate, the Government make the decision on shared rooms rather than single rooms. Again, what the Government say conflicts with all the evidence.
The survey of the National Council for Voluntary Organisations, which was published in February 1986, showed that average charges for voluntary homes were between £130 and £180, yet the Government are patting themselves on the back for having increased the limit to £125. In May, the Council for Care of the Elderly showed that even inexpensive, voluntary, non-profit making


homes in London charged about £189, while many charged £220. Thus there is a deficit of at least £50 on the sum that the Government are allowing.
As people cannot meet those charges, about one third of the more than 50,000 people in geriatric wards, who would like to leave, are stuck there, even though it costs the taxpayer at least £300 to £320 to keep them in unsuitable accommodation, It is not clear from what has been said, although I thought that we had got things clear at Question Time yesterday, whether people who become blind or otherwise incapacitated and who are over pension age will continue to receive only the lower rate of benefit. I thought that we had clarified that point, but it seemed less clear from what the Minister said.
I shall repeat a point that he put when the statement was first made. If, as the Government argue, the general limits that they are imposing are adequate, why increase the transitional protection? What is the argument for that? The transitional protection applies only to limits that are already above the figure that the Government are giving. If it has to be increased, the limits must be inadequate. That seems to follow logically.
I am sorry to say that, once again, in these regulations the Government are attacking the victims rather than the problem. They have carried out research and surveys, not in order to establish what the problem is, or to find out how to solve it, but to justify what they did, and were overturned in the courts for doing three times during the past year. Once again this Government are flying in the face of all independent evidence, of much of their own evidence. Once again, unfortunately, it is the vulnerable, elderly, young and handicapped who are suffering.

The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Major): We have had an interesting and wide-ranging debate, and in the few minutes left to me I shall endeavour to answer as many of the important matters raised as possible.
Throughout the debate I have been particularly struck by the fact that, with the possible exception of the reservations expressed by the hon. Member for Fulham (Mr. Raynsford), there seems to be general concurrence with the basic principle that benefits are an inappropriate way of supporting students. My hon. and learned Friend the Member for Mid-Bedfordshire (Mr. Lyell) made that point, as did other hon. Members, and the hon. Member for Oldham, West (Mr. Meacher) certainly conceded more than a general nod in that direction. I am delighted that on that point, at least, there seems to be an element of near consensus.
There can, of course, be very severe and legitimate conflict about the nature and extent of student support through the grants system. But the fact that there is a broad consensus about how the assistance can be delivered gives us a worthwhile and useful backcloth to the inquiries established by my right hon. Friend the Secretary of State for Education and Science. I shall, in particular, draw his attention to the blandishments of the hon. Member for Derby, South (Mrs. Beckett) about what may or may not be in his report. I am sure that he will give that due care and consideration.
The original package of measures that we put to the SSAC and the local authority associations was designed primarily to tackle those aspects of the present arrangements that we felt could not be justified either in

principle—I have in mind the double provision of grants and unemployment benefit during the short vacations—or in administrative terms— I have in mind the need to reassess housing benefit by up to six times a year under the present system. The advisory committee and the local authority associations had little to quarrel with in principle. But they of course had some concerns about the practical effects.
In these regulations we have sought as far as we think proper to respond to those concerns. The result is the revised package before the House today, which still tackles the most wasteful aspects of the system, but which has been very considerably modified to reduce its impact on students, and I am grateful to those hon. Members who made that point today.
At the beginning of his speech, the hon. Member for Oldham, West asked what might be thought to be the fundamental question. He referred to the student changes and asked why we should cause this upheaval when there appeared to be only small savings. He correctly quoted the figures, and asked why we should cause what he saw as major inequities between students. There are several observations to make about that, as it is an important point.
I am not sure that I accept—and if the hon. Member for Oldham, West was standing at this Dispatch Box, I am not sure that he would accept it either—that a saving of £16 million in a full year is an insignificant sum, particularly bearing in mind, say, the double provision of grants and unemployment benefit during the short vacations. My hon. Friend the Minister has already pointed out the wholly disproportionate administrative costs of delivering very small amounts of benefit. It is absurd to have a £1 million administrative cost for delivering £3 million of unemployment benefit and to have a £3 million administrative cost for delivering £5 million of housing benefit for halls of residence. That is not a worthwhile use of the limited resources that any Secretary of State has to hand. I think that the hon. Gentleman would recognise that if he was in charge of these regulations—[Interruption.]
The hon. Members for Derby, South and for Oldham, West spoke about the failure, as they saw it, to control prices in the context of the social security policy inspectorate study. They clearly felt that the proposals had failed to control prices and that landlords had not dropped them. However, we have very firm indications from our local offices throughout the country that landlords have held, and in other places dropped, their prices significantly. More than 85 per cent. of our local offices are known to have experienced charges being maintained at the same levels when price rises would have been automatic if limits had been increased after November 1984.
In the south London and south-west regions—two regions with a high number of boarders and incidences of reported abuse — more than 90 per cent. of offices confirmed that charges had been pegged. That is an important point.
I should tell the hon. Member for Derby, South, that, if I remember correctly, the cost of Ernst and Whinney was approximately £110,000. However, if that is inaccurate I shall write to tell her.
I was asked about help for families with children. Children aged over 11, who would normally be expected to occupy a separate room, are eligible for the adult rate,


whereas younger children receive one and a half times the normal scale rate, with an amount for personal expenses on top.
My hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) felt that housing benefit should be withdrawn more gradually. The changes that we are making do not affect the greater part of housing benefit expenditure on students. Entitlement remains for those in private accommodation, and for any student who stays in his accommodation in the summer when he has no grant resource, even if he is in a hall of residence. We are therefore seeking to meet the point that concerns my hon. Friend, and, time permitting, I shall return to some of his other comments later.
The hon. Member for Fulham referred to the non-householder contribution, and asked how many non-householders currently receiving the non-householder contribution would cease to receive it. The answer is none. We have ensured in the regulations that all existing recipients of the contribution will not be affected by the changes. There will, therefore, be no cash losers. Similarly, where a non-dependant deduction is made in respect of a 21 to 24-year-old on supplementary benefit, it will continue to be made.
I was also asked how many students in halls of residence received housing benefit. Our estimate is that there are between 80,000 and 85,000 students in halls of residence who claim housing benefit currently, but that in many cases the weekly entitlement is very small indeed.
The hon. Member for Liverpool, Mossley Hill (Mr. Alton) spoke about the abuse of housing benefit by landlords. I responded substantially to his point in my intervention, as did my hon. Friend the Minister, but I have also written to him on that point and I hope that he will receive the letter within a day or so.
My hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo) raised a specific point about another area requiring reform which was forcibly brought to my attention by my hon. Friend the Member for South Ribble (Mr. Atkins). That was the need for retaining fees for temporary absence from care. That was a sensitive and acute problem. As the House will be aware, residential care and nursing homes are increasingly the permanent home for elderly and disabled people. I am glad that the changes we have made to retaining fees will enable many elderly people to take a holiday from such homes without an unfortunate effect on them or the home that is now their permanent home.
We have received a substantial amount of support for the regulations on housing benefit for students. I believe that the regulations are defendable in principle, defendable in logic, and defendable in equity. I commend them to the House.

It being Seven o'clock, MR. DEPUTY SPEAKER put the Question, pursuant to the Order [27 June].

Question agreed to.

Resolved,
That the draft Supplementary Benefit (Requirements and Resources) Miscellaneous Amendment Regulations 1986, which were laid before this House on 18th June, be approved.

MR. DEPUTY SPEAKER proceeded, pursuant to the Order [27 June], to put forthwith the Question on the remaining motion.

SUPPLEMENTARY BENEFIT

Resolved,
That the draft Supplementary Benefit (Requirements and Resources) Amendment Regulations 1986, which were laid before this House on 26th June, be approved.—[Mr. Newton.]

HOUSING BENEFIT

Motion made, and Question put,
That a humble Address be presented to Her Majesty praying that the Housing Benefits Amendment (No. 3) Regulations 1986 (S.I., 1986, No. 1009), dated 13th June 1986, a copy of which was laid before this House on 18th June, be annulled.—[Mr. Rooker.]

The House divided: Ayes 160, Noes 232.

Division No. 241]
[7 pm


AYES


Adams, Allen (Paisley N)
Foster, Derek


Alton, David
Foulkes, George


Anderson, Donald
Fraser, J. (Norwood)


Archer, Rt Hon Peter
Garrett, W. E.


Ashdown, Paddy
Gilbert, Rt Hon Dr John


Ashton, Joe
Gourlay, Harry


Atkinson, N. (Tottenham)
Hamilton, James (M'well N)


Bagier, Gordon A. T.
Hamilton, W. W. (Fife Central)


Banks, Tony (Newham NW)
Hancock, Michael


Barnett, Guy
Harrison, Rt Hon Walter


Beckett, Mrs Margaret
Hattersley, Rt Hon Roy


Bell, Stuart
Heffer, Eric S.


Benn, Rt Hon Tony
Hogg, N. (C'nauld &amp; Kilsyth)


Bennett, A. (Dent'n &amp; Red'sh)
Holland, Stuart (Vauxhall)


Bermingham, Gerald
Home Robertson, John


Bidwell, Sydney
Howells, Geraint


Boyes, Roland
Hughes, Dr Mark (Durham)


Bray, Dr Jeremy
Hughes, Robert (Aberdeen N)


Brown, Gordon (D'f'mline E)
Hughes, Roy (Newport East)


Brown, Hugh D. (Provan)
Hughes, Simon (Southwark)


Brown, N. (N'c'tle-u-Tyne E)
Jenkins, Rt Hon Roy (Hillh'd)


Brown, R. (N'c'tle-u-Tyne N)
John, Brynmor


Brown, Ron (E'burgh, Leith)
Johnston, Sir Russell


Buchan, Norman
Jones, Barry (Alyn &amp; Deeside)


Caborn, Richard
Kaufman, Rt Hon Gerald


Callaghan, Jim (Heyw'd &amp; M)
Kennedy, Charles


Canavan, Dennis
Kirkwood, Archy


Carter-Jones, Lewis
Leadbitter, Ted


Cartwright, John
Leighton, Ronald


Clark, Dr David (S Shields)
Lewis, Ron (Carlisle)


Clarke, Thomas
Lewis, Terence (Worsley)


Clay, Robert
Lloyd, Tony (Stretford)


Clelland, David Gordon
Lofthouse, Geoffrey


Clwyd, Mrs Ann
McCartney, Hugh


Cocks, Rt Hon M. (Bristol S)
McDonald, Dr Oonagh


Cohen, Harry
McKelvey, William


Conlan, Bernard
MacKenzie, Rt Hon Gregor


Cook, Frank (Stockton North)
Maclennan, Robert


Cook, Robin F. (Livingston)
McTaggart, Robert


Corbett, Robin
Madden, Max


Corbyn, Jeremy
Marek, Dr John


Craigen, J. M.
Marshall, David (Shettleston)


Crowther, Stan
Mason, Rt Hon Roy


Davis, Terry (B'ham, H'ge H'l)
Maxton, John


Deakins, Eric
Maynard, Miss Joan


Dewar, Donald
Meacher, Michael


Dixon, Donald
Meadowcroft, Michael


Dormand, Jack
Michie, William


Douglas, Dick
Mikardo, Ian


Dubs, Alfred
Millan, Rt Hon Bruce


Duffy, A. E. P.
Morris, Rt Hon J. (Aberavon)


Dunwoody, Hon Mrs G.
Nellist, David


Eastham, Ken
Oakes, Rt Hon Gordon


Evans, John (St. Helens N)
O'Brien, William


Ewing, Harry
Park, George


Fatchett, Derek
Patchett, Terry


Fields, T. (L'pool Broad Gn)
Pavitt, Laurie


Fisher, Mark
Pendry, Tom


Flannery, Martin
Penhaligon, David


Foot, Rt Hon Michael
Pike, Peter


Forrester, John
Prescott, John






Radice, Giles
Soley, Clive


Randall, Stuart
Spearing, Nigel


Raynsford, Nick
Steel, Rt Hon David


Richardson, Ms Jo
Stott, Roger


Robinson, G. (Coventry NW)
Straw, Jack


Rogers, Allan
Thompson, J. (Wansbeck)


Rooker, J. W.
Thorne, Stan (Preston)


Ross, Ernest (Dundee W)
Tinn, James


Ross, Stephen (Isle of Wight)
Wainwright, R.


Rowlands, Ted
Wallace, James


Sedgemore, Brian
Wareing, Robert


Sheerman, Barry
Williams, Rt Hon A.


Shields, Mrs Elizabeth
Wilson, Gordon


Shore, Rt Hon Peter
Winnick, David


Short, Ms Clare (Ladywood)
Woodall, Alec


Short, Mrs R.(W'hampt'n NE)
Wrigglesworth, Ian


Silkin, Rt Hon J.
Young, David (Bolton SE)


Skinner, Dennis



Smith, C.(lsl'ton S &amp; F'bury)
Tellers for the Ayes:


Smith, Rt Hon J. (M'ds E)
Mr. Ray Powell and


Snape, Peter
Mr. Allen McKay.


NOES


Adley, Robert
Fookes, Miss Janet


Alexander, Richard
Forman, Nigel


Alison, Rt Hon Michael
Forsyth, Michael (Stirling)


Amess, David
Forth, Eric


Ancram, Michael
Fowler, Rt Hon Norman


Atkins, Rt Hon Sir H.
Franks, Cecil


Atkins, Robert (South Ribble)
Fraser, Peter (Angus East)


Atkinson, David (B'm'th E)
Freeman, Roger


Banks, Robert (Harrogate)
Fry, Peter


Batiste, Spencer
Gale, Roger


Beaumont-Dark, Anthony
Galley, Roy


Bellingham, Henry
Gardiner, George (Reigate)


Benyon, William
Gardner, Sir Edward (Fylde)


Best, Keith
Garel-Jones, Tristan


Bevan, David Gilroy
Glyn, Dr Alan


Boscawen, Hon Robert
Goodhart, Sir Philip


Bottomley, Peter
Gorst, John


Bottomley, Mrs Virginia
Gow, Ian


Braine, Rt Hon Sir Bernard
Gower, Sir Raymond


Brandon-Bravo, Martin
Greenway, Harry


Bright, Graham
Gregory, Conal


Brittan, Rt Hon Leon
Griffiths, Sir Eldon


Brown, M. (Brigg &amp; Cl'thpes)
Griffiths, Peter (Portsm'th N)


Browne, John
Gummer, Rt Hon John S


Bruinvels, Peter
Hamilton, Neil (Tatton)


Buchanan-Smith, Rt Hon A.
Hampson, Dr Keith


Burt, Alistair
Hanley, Jeremy


Carlisle, Rt Hon M. (W'ton S)
Hargreaves, Kenneth


Carttiss, Michael
Harris, David


Chapman, Sydney
Harvey, Robert


Chope, Christopher
Hawkins, C. (High Peak)


Churchill, W. S.
Hawksley, Warren


Clark, Sir W. (Croydon S)
Hayes, J.


Cockeram, Eric
Hayward, Robert


Colvin, Michael
Heathcoat-Amory, David


Conway, Derek
Heddle, John


Coombs, Simon
Henderson, Barry


Cope, John
Hickmet, Richard


Couchman, James
Higgins, Rt Hon Terence L.


Cranborne, Viscount
Hind, Kenneth


Currie, Mrs Edwina
Hirst, Michael


Dorrell, Stephen
Hogg, Hon Douglas (Gr'th'm)


Douglas-Hamilton, Lord J.
Holland, Sir Philip (Gedling)


Durant, Tony
Holt, Richard


Emery, Sir Peter
Hordern, Sir Peter


Fallon, Michael
Howard, Michael


Favell, Anthony
Howarth, Alan (Stratf'd-on-A)


Fenner, Mrs Peggy
Howarth, Gerald (Cannock)


Fletcher, Alexander
Howell, Ralph (Norfolk, N)





Hunt, David (Wirral W)
Proctor, K. Harvey


Hunt, John (Ravensbourne)
Rathbone, Tim


Hunter, Andrew
Rhodes James, Robert


Jackson, Robert
Rhys Williams, Sir Brandon


Jenkin, Rt Hon Patrick
Ridley, Rt Hon Nicholas


Johnson Smith, Sir Geoffrey
Ridsdale, Sir Julian


Jones, Gwilym (Cardiff N)
Robinson, Mark (N'port W)


Jones, Robert (Herts W)
Roe, Mrs Marion


Kellett-Bowman, Mrs Elaine
Rost, Peter


Key, Robert
Rowe, Andrew


King, Roger (B'ham N'field)
Ryder, Richard


Knight, Greg (Derby N)
Sayeed, Jonathan


Lang, Ian
Shaw, Sir Michael (Scarb')


Lawler, Geoffrey
Shelton, William (Streatham)


Lawrence, Ivan
Shepherd, Colin (Hereford)


Lee, John (Pendle)
Shersby, Michael


Leigh, Edward (Gainsbor'gh)
Sims, Roger


Lewis, Sir Kenneth (Stamf'd)
Skeet, Sir Trevor


Lloyd, Sir Ian (Havant)
Smith, Tim (Beaconsfield)


Lloyd, Peter (Fareham)
Soames, Hon Nicholas


Lord, Michael
Speed, Keith


Lyell, Nicholas
Speller, Tony


McCrindle, Robert
Spencer, Derek


McCurley, Mrs Anna
Spicer, Michael (S Worcs)


Macfarlane, Neil
Stanbrook, Ivor


MacKay, Andrew (Berkshire)
Steen, Anthony


MacKay, John (Argyll &amp; Bute)
Stern, Michael


Maclean, David John
Stevens, Lewis (Nuneaton)


McNair-Wilson, M. (N'bury)
Stewart, Allan (Eastwood)


Major, John
Taylor, John (Solihull)


Malins, Humfrey
Tebbit, Rt Hon Norman


Maples, John
Thomas, Rt Hon Peter


Marland, Paul
Thompson, Donald (Calder V)


Marlow, Antony
Thompson, Patrick (N'ich N)


Mates, Michael
Thorne, Neil (Ilford S)


Mather, Carol
Thornton, Malcolm


Maude, Hon Francis
Thurnham, Peter


Mawhinney, Dr Brian
Townend, John (Bridlington)


Maxwell-Hyslop, Robin
Tracey, Richard


Mellor, David
van Straubenzee, Sir W.


Merchant, Piers
Vaughan, Sir Gerard


Meyer, Sir Anthony
Waddington, David


Mills, Sir Peter (West Devon)
Wakeham, Rt Hon John


Miscampbell, Norman
Waldegrave, Hon William


Moate, Roger
Walden, George


Montgomery, Sir Fergus
Walker, Bill (T'side N)


Moore, Rt Hon John
Walker, Rt Hon P. (W'cester


Morris, M. (N'hampton S)
Wall, Sir Patrick


Morrison, Hon C. (Devizes)
Waller, Gary


Moynihan, Hon C.
Wardle, C. (Bexhill)


Neale, Gerrard
Warren, Kenneth


Nelson, Anthony
Watson, John


Neubert, Michael
Watts, John


Newton, Tony
Wells, Bowen (Hertford)


Nicholls, Patrick
Wells, Sir John (Maidstone)


Normanton, Tom
Wheeler, John


Norris, Steven
Whitfield, John


Onslow, Cranley
Wiggin, Jerry


Oppenheim, Phillip
Winterton, Mrs Ann


Ottaway, Richard
Winterton, Nicholas


Page, Richard (Herts SW)
Wolfson, Mark


Pawsey, James
Wood, Timothy


Peacock, Mrs Elizabeth
Yeo, Tim


Pollock, Alexander
Young, Sir George (Acton)


Porter, Barry
Younger, Rt Hon George


Portillo, Michael



Powley, John
Tellers for the Noes:


Prentice, Rt Hon Reg
Mr. Mark Lennox-Boyd and


Price, Sir David
Mr. Archie Hamilton.

Question accordingly negatived.

Orders of the Day — Housing (Scotland) Bill

Lords amendments considered.

Clause 2

INCREASED DISCOUNT WHERE DWELLING-HOUSE PURCHASED IS A FLAT

Lords amendment: No. 1, in page 2, line 12, leave out "(2)" and insert "(3)".

The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker (Mr. Harold Walker): With this it will be convenient to consider Lords amendments Nos. 2 to 4.

Mr. Ancram: Hon. Members may recall that when the Bill had its Report stage on 4 March concern was expressed that the provisions of clause 2, which provides for improved discount on flats, did not go far enough, and in particular were less generous than the corresponding provisions of the Housing and Planning Bill, as it had been amended in Standing Committee.
On that occasion, I said that I recognised the strength of the views which had been expressed. I accepted also that it would not be right in principle for tenants who live in similar houses to have a different entitlement to discount in England and Scotland. I said, therefore, that the Government would look again at the discount which should be available on flats. The present amendments are the result.
As introduced, the Bill proposed that discount on flats under the right to buy should be increased by 10 per cent. Under our original proposals, people buying a flat would have been entitled to a new minimum discount of 42 per cent. after two years, rising to 70 per cent. after 30 years.
Amendments Nos. 1 to 3 provide a better deal for flat purchasers. We are now proposing that discount entitlement should rise by steps of 2 per cent. each year, instead of 1 per cent. as at present. A tenant with the minimum of two years standing will therefore be entitled to a discount of 44 per cent. on a flat, and the maximum of 70 per cent. will be reached after 15 years.
The upper and lower limits of the discount scale on flats sold under the right to buy will therefore remain virtually the same as in the Bill as introduced. However, the time required in order to qualify for the maximum discount will be halved. This will benefit the tenants of all types of flats. It recognises that, because of the way in which local authority allocation systems operate, tenants of flats tend to be younger people, and I believe that the amendments will be particularly welcomed by younger purchasers taking their first steps into home ownership.
These amendments fulfil the undertaking I gave to this House in March that we would again see whether we could improve our proposals for discounts on flats. They are consistent with amendments which have been carried to the Housing and Planning Bill, so that the rules on entitlement to discount will remain the same in Scotland

as in England. I believe that the amendments will contribute to our aim of further promoting home ownership amongst tenants of council flats. I am confident that they will be particularly welcomed by younger purchasers.

Mr. John Maxton: These amendments are horrendous. The more I look at them, the more horrendous they become. I should like first to deal with the reasons why the Government considered it necessary to introduce them at all. The reason which we have been given is that the majority of members of the Standing Committee on the Housing and Planning Bill decided that they wanted a change in the upper discount for those who lived in high-rise or deck-access flats—hard-to-let flats—in England and Wales.
The Government said that the House believed that there should be an improved discount, but that was not the view of the majority on the Standing Committee on the Housing (Scotland) Bill. If the Under-Secretary of State is going to plead, as did the Secretary of State on Monday, how good it is that we have separate Scottish legislation and that things can be done differently in Scotland, it ill becomes him to say that, just because something has happened in England and Wales, he will immediately bring Scotland into line. It should not work that way.
We shall see when we consider later Lords amendments that the Government are not prepared to go along with what happens in England and Wales; yet, in this measure, which is another attempt to give away housing, that is what the Under-Secretary of State is prepared to do.
It must be continually pointed out that there is a difference between England and Wales in council housing stock and attitudes to housing. In England, the proportion of housing that is council controlled and the proportion of those council dwellings that are flats are considerably smaller than in Scotland. The attitude to renting in Scotland is based on a much stronger tradition than in England, and most people would happily accept that attitude. There is a difference of which the Government should take account when considering council house sales and tenants' rights. We must look at Scotland in a different way.
The amendments go considerably wider than the original proposal in Committee on the Housing and Planning Bill, which was limited to what were considered to be hard-to-let flats in high-rise blocks and deck-access blocks. This group of amendments extends to every flat in council ownership. By the Government's definition, that includes attractive—certainly in Glasgow terms— four-in-a-block flats. Those flats can be found in the constituencies of my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) and of hon. Members from Glasgow and the west of Scotland as well as in my constituency. They are the most desirable form of housing in the Glasgow district council's stock. The provision to do something about hard-to-let property is now being extended to highly desirable property, giving those who are in housing in which they want to live anyway a massive and accelerated discount.
I shall give an example of a person who lives in a Glasgow council flat in Moss Park, in the constituency of my right hon. Friend the Member for Glasgow, Govan (Mr. Millan), or in Knightswood, in the constituency of my hon. Friend the Member for Garscadden. Both areas are sought after by council house tenants in Glasgow. At


present—I have checked this with the Glasgow district council—a flat there would be valued at approximately £21,000. Someone who originally got a tenancy from the Glasgow district council or from any other district council at the age of 21 could, at the age of 35, purchase that house —he may not have lived in it for more than one day—for £6,300. Three years later he can sell the house for £21,000. I am not including any profit he may make, but I accept that he will probably get something for inflation, so he would probably sell it at £22,500 or £23,000. However, even if he sold it for £21,000 he is making £14,700 at the age of 37. I wish at the age of 37 someone had given me a lump sum of £14,700 to spend on my housing. Many people who have always lived in the private sector would have loved to have had that amount of money to invest in their housing at the age of 37 or 38.
Let us look at exactly what that means. The people who sell their flats in that way have £14,700. What have they paid out for that flat over 15 years? At present the amount paid by council house tenants in somewhere such as Mosspark is about £100 a month in rent and rates. Therefore, they are paying approximately £1,200 a year. Fifteen years ago they were paying about £20 a month in rent and rates. If we average it out and say that over the 15 years they have paid an average of £500 a year in rent and rates, they are now taking away almost double what they have paid in for their housing. Therefore, they have had their house for 15 years rent and rates free. In fact, they have been paid to live in that council house for 15 years. That is what this amendment means.

Mr. Ancram: It is a flat.

Mr. Maxton: The Minister is obviously now very embarrassed and squirming because he has no answer other than to sit there and say "flat" every time I say "house". If Hansard would like to put in "flat" every time I say "house" that will suit me fine. I shall say "flat" because these are highly desirable flats.

Mr. David Marshall: Does my hon. Friend agree that he should perhaps reinvestigate the value of the houses. I am astonished to hear him say that they are only £21,000. I have houses in my constituency —they are houses, not flats—with three bedrooms and a front door and a garden or, in many cases, a side door and a garden. They are in the most desirable parts of the city. In Sandyhills in my constituency they are valued at £26,000. They are very desirable houses. I think that my hon. Friend's figures slightly undervalue the houses. No one in Glasgow would describe them as flats.

Mr. Maxton: My hon. Friend makes a good point. However, I phoned Glasgow district council this afternoon to check the figures and it said that the valuation for a three-bedroomed fiat in Mosspark is £21,000. That is the valuation for sale which is based on the fact that there is a sitting tenant. If one buys a property for investment and it has a sitting tenant, one buys it at a cheaper price than if it has vacant possession. The Minister always claims that that is what the discounts are about. But that is another matter. My hon. Friend the Member for Shettleston is right; the person may be able to sell it three years later for £28,000 or £29,000. I am being modest in saying it would be sold for £21,000. Therefore, the profit margin is bigger. What I am saying is that, even if it is sold at the price it was bought for, the person will have been paid roughly

£500 a year for each of the 15 years he has lived in that house rent and rates free. That is an absolute rip-off of public property. It has nothing to do with the principle of whether one buys or sells. It is to do with whether we have a Government who have any regard for public expenditure and the public purse. They keep claiming that that is what the Government are about.

Mr. Ancram: I am listening carefully to the hon. Gentleman's argument. He suggests that these flats—I use the word advisedly because it is the word in the amendment—are attractive and that therefore any help to people to buy them is, in effect, a rip-off. If they are so attractive, can he tell me how many of the flats are at present being sold to their sitting tenants?

Mr. David Marshall: Too many.

Mr. Maxton: I would accept that in Glasgow there has not been any great rush to buy. Surely that might just say to the Minister that his policy is wrong and that the tenants in Glasgow do not particularly want to buy their houses. He is doing everything to get rid of them. He is giving them away now. He is telling people they can live rent and rates free for 15 years and the Government will then pay them a bonus of £500 for every year they have been in the house—sorry, I mean flat. I must get it right or the Minister will complain. As my hon. Friend the Member for Shettleston said, many people consider those four-in-a-block flats as houses because many of them are on the ground floor and have a garden, a drive and a garage and all the things most people would consider to be highly desirable. Of course there are other flats. [Interruption.] The Minister says that they are selling increasingly. Yes, they are selling. [Interruption.] The Minister says "Good" because he wants to be rid of them. If the Minister or his right hon. and hon. Friends were to show the same disregard for the shares of the British Gas Corporation or British Telecom he would be rooted out of the Government by his right hon. Friend the Prime Minister so fast that his feet would not touch the ground because his action would be against every principle that the Government stand for — probity in terms of public finance, controlling public expenditure and trying to ensure that we have efficiency in the public sector. The Government are giving away money and giving away public property at knock-down prices not even for the sake of a principle because there is nothing principled about it. They have an antipathy and hatred of all that is in local authority control and they want to do something about it. They are trying to give away the flats.
I can assure you, Mr. Deputy Speaker, that I shall be urging all my right hon. and hon. Friends to vote against this amendment.

Mr. Hugh Brown: I know we need to be brief but it would be wrong to let this pass without having another observation on it. I must say to the Minister in the kindest possible way that the Bill has been badly handled. I would describe it as a complete and utter shambles. It was not prepared properly and there have not been enough discussions. He knows that to be true. Then it had to suffer so many defeats in the Lords. Perhaps there is a badge to be awarded to Ministers who reverse unpopular decisions made in the other place by their own supporters.
I am not sure what our view is on this. Perhaps somebody will put me right if I am wrong. I do not


necessarily believe that it has to be on all fours with the discount in England and Wales. It is difficult because if there is something better or more generous in England and Wales we would be complaining if we did not have a right to it. Therefore, there is an element of doubt about the right way to proceed in this. I am not concerned about whether the aim is to be on all fours with England and Wales. I am looking at the matter purely on the basis of whether the change in the discount is a good thing. I believe that it is not.
7.30 pm
Obviously, I slipped up on this. When we discussed the Bill on Second Reading and in Committee, I confess that I did not realise that a flat was what we would call a four-in-a-block house. That is typical of technical descriptions not being in accordance with what things are popularly understood to be. I am sure that that was an omission on my part, and that there has been no change, as the Minister said.
Most of the flats about which I am concerned are in good quality housing areas. To me, a flat is a tenement flat, and there are many of them in good housing areas. In Riddrie, for example, we would be giving a 70 per cent. discount in good quality property in a highly desirable area with one of the highest amenity groupings in Glasgow. Frankly, the lengths to which the Government are going to keep up their statistics for the number of houses being sold are absurd. That is what is behind it.
I refuse to give the Government credit for having a housing policy.

Mr. Ancram: What about the Green Paper?

Mr. Brown: The Minister quotes the Green Paper to me with great regularity, but he is not getting away with it this time. It was never my intention to go along the road of flinging houses away at a 70 per cent. discount after 15 years' tenancy.
The disadvantage is that these are good houses. I do not want to rehearse all the arguments. If they are not being sold now under the present discount, this little bonus will have little or no effect. That is my guess. It might look all right, but I do not think that there will be much effect. The present level of discount is so generous that if people have not bought their houses by now I doubt whether the extra discount will make a great difference. Therefore, I do not see the need for the amendment. On that general principle, I shall vote against it.
The Bill is a shambles. This is the third attempt by the Government to change the discounts in fewer than five years. They will have to realise this sooner or later. There is a growing hope among many families in what are called difficult-to-let areas that they will move out of those areas. They cannot afford to take on a mortgage because they are on low income or supplementary benefit. If they cannot move out or have no hope of moving out, there is greater hopelessness. I warn the Minister that sooner or later, whether it is drug abuse, alcohol abuse or violence, the end result to the big housing estates will be social trouble of one sort or another. The Government, who do not care about those problems, much as they always say they do—

Mr. Ancram: We do care.

Mr. Brown: If the Government had any knowledge or feeling for those problems, they would be putting more resources into those areas than they are now. This is a trivial way in which to pursue an ideological objective. I know that we shall not win in the vote tonight, but I have no compunction about voting against the amendment. I hope that the public will realise that this Government are a poor substitute for a housing policy. The sooner we get a Government who know something about housing the better.

Sir Russell Johnston: The hon. Member for Glasgow, Provan (Mr. Brown) put a contradictory case. He said that this was a bad proposition and then he said that it would not make much difference and that it was essentially trivial. If it is essentially trivial, I am not sure why we are making such a tremendous fuss about it.
Secondly, we are not making a judgment on the absence of a housing policy, which, I agree, is true in respect of the Government. Throughout the Committee I took the position that we in the alliance support the right to buy, and accept that the various incentives that the Government have introduced with a view to improving the possibility of people doing so and enabling those in some difficulty to do so more easily may be a crude form of redistribution, but it is a form of redistribution. I recognise it as such.
The Government have failed in that, while being willing to reduce the available public stock by the amount that is sold, at the same time they have been unwilling to make available to the local authority the necessary finance to provide more general needs housing. Therefore, I do not see any particular contradiction in saying that I accept the system of discount, but that does not lead me to say that I think that the Government have a housing policy or that this is a central issue in housing policy, or, further, that they should not make available more money for general needs housing.

Mr. Donald Dewar: I accept for the moment that the hon. Gentleman is in favour of a sales policy and sees a discount as a form of redistribution. Is he happy with the rather arbitrary way in which people who may be in the most attractive and desirable properties with the largest possibility of capital gains are being given an unnatural advantage in an accelerated discount buildup as against other tenants who might want to buy their council houses? Is not the hon. Gentleman slightly offended by the illogicality of the amendment?

Sir Russell Johnston: It is not exactly illogicality; it is a fact that one cannot devise the perfect legislative way of doing it. Some people will benefit considerably. The hon. Gentleman is right about that. It is also a fact that people who are buying are the best off. They are the people who are best able to do it. The other side of the argument is that the Minister would reasonably say, "I am giving them, on an incremental basis, a considerable discount that will enable certain people who otherwise would not be able to contemplate purchase to do so." Although the system produces the unfairnesses and disparities that the hon. Gentleman properly puts his finger on, I am prepared to thole that in pursuit of the other general principle.

Mr. Barry Henderson: Will the hon. Gentleman give way?

Sir Russell Johnson: I am sure that you would be happier if I sat down, Mr. Deputy Speaker.

Mr. Henderson: I had not intended to speak, but I should like to make a point arising out of the exchange between the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) and the hon. Member for Glasgow, Garscadden (Mr. Dewar).
I am puzzled by the position of the alliance. To say that the alliance is in favour of sales is perhaps going too far. It is not against sales, which is the way in which the alliance tends to express its policy. It sounds as if it is not against sales in a few selective cases that it can imagine on occasions. It is not in favour of the right to buy. If I remember correctly, the Liberals have always voted against any extension of the discount system.
In the exchange between the two hon. Members to whom I referred, it seemed to me that the hon. Member for Garscadden was implying that the people covered by this part of the Bill are particularly favoured, but surely we are talking about flats—large blocks of flats. [HON. MEMBERS: "No."]

Mr. Maxton: That is the point. We are not necessarily talking about large blocks of flats. If the hon. Gentleman has been in Glasgow he will have seen what are called four-in-a-block houses, where there are only four flats in one building. Therefore, they are deemed by the Bill to be flats which could be sold with the discount.

Mr. Henderson: The hon. Gentleman's point might have had a little more validity if the distinction which he makes had been made in amendments tabled by the Opposition during the passage of the Bill. I was not a member of the Committee that considered the Bill. The Opposition may have moved amendments in Committee, in which case I apologise, but I was not aware of amendments appearing on the Floor of the House. In general, flats are not the most popular types of council houses available. They are not the most popular types of houses for people in the housing associations sector. To suggest that a specially privileged group has been given some special deal is fallacious. The Government's policy is much more reasonable.
The Labour party has consistently made it clear where it stands on the issue. I wish that we could obtain the same clarity from the Liberal party. It seems to be trying to find a position somewhere between the Labour party and the Tory party. There is no logical position on which it can rest its case.

Mr. Ancram: With the leave of the House, may I sum up some points that have been made in the debate? Had my hon. Friend the Member for Fife, North-East (Mr. Henderson) been on the Committee he would have had no difficulty with the position of the Liberal spokesman, the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) who, like his colleague the hon. Member for Gordon (Mr. Bruce) on a previous Bill, proved that the Liberal policy is simple. The Liberal party is for the principle of the right to buy but against the practice. It is a good position, and one which I am sure it will try to maintain for many years to come.
The hon. Member for Glasgow, Provan (Mr. Brown) continues to accuse me of not having a housing policy. If he considers the policy that has been operated by the Government since 1979 he will discover that he, if not its

direct father, at least has a close relationship with it in terms of the Green Paper for which he was responsible in 1977, and to which Conservative Members have always given more credence than his hon. Friends and colleagues gave it when it was published.

Mr. Dewar: It is a splendid document.

Mr. Ancram: I am delighted to hear from the Opposition Front Bench spokesman that that is incorrect and that he regards it as a splendid document. I look forward to the greatest support from him for our housing policy.
The hon. Member for Provan made the valid point that we keep changing the discount. He is a man who believes in learning by experience. When the discounts were introduced in 1980, it was understood by all that, as we saw how it worked, we would review it. I do not wish to discuss in detail the figures which were given a great airing in Committee, but it is clear from the figures that flats, and that includes four-in-a-block houses, have not sold as well as ordinary council houses. The figure that I gave in Committee was somewhere between 4 and 5 per cent. That is the upper limit of the figure of flats, although there is a distinction between the types of flats. That compares with 14 per cent. for self-contained houses.
The reason for that, as I tried to say earlier during the course of the legislation, is that there are extra obligations and undertakings when buying a flat which do not exist when buying a self-contained house. The most obvious of those are the common charges for which the owner might be liable. That was why we moved an amendment to increase the discount to 70 per cent. During Committee proceedings on the Housing and Planning Bill, Opposition Members moved an amendment to introduce a better discount scheme for flats—

Mr. Maxton: rose—

Mr. Ancram: Allow me to finish. I never give way in the middle of a sentence. I shall give way when I have finished it. During the course of the legislation, we accepted that we should reconsider types of flats, and the people who live in them. I understood, perhaps wrongly, that the Labour party intended to encourage and help younger house purchasers. Here is an example, as I said in my earlier remarks, where that could be achieved by giving a better rate of discount to those who live in flats, accepting that most of them are young.
On the basis of the experience of the right-to-buy policy, we accepted that further changes in the discount were required, and they have been made. When the Bill was in the other place, their Lordships — from all political parties—did not see fit to divide on this matter, so the principle was given credence in that House.

Mr. Maxton: The Minister should not distort that amendment. It did not refer to flats; it referred to a specific group of flats which are recognised as being hard to let and hard to sell. They are high-rise deck-access flats. That amendment did not extend to all flats as this amendment does.

Mr. Ancram: I accept that the hon. Gentleman's colleagues made it clear in Committee that they were not averse to the principle of applying higher discounts to flats that are hard to let. They accepted that there were good reasons in some cases for applying discounts. That is not


the line that the hon. Member for Glasgow, Cathcart (Mr. Maxton) has taken this evening. He has once again shown us—I shall not ask him again what the Labour party policy is, since I have asked him enough times—that the Labour party, whatever the fudge that came out of its conference last March, is still opposed to the right to buy. That is the basic objection. On that basis, the hon. Gentleman is asking his hon. Friends to vote against the amendment. On that basis, I call on my hon. Friends to support the amendment.

Question put, That this House doth agree with the Lords in the said amendment:—

The House divided: Ayes 166, Noes 91.

Division No. 242]
[7.46 pm


AYES


Alton, David
Holt, Richard


Ancram, Michael
Howarth, Gerald (Cannock)


Ashdown, Paddy
Howell, Ralph (Norfolk, N)


Atkins, Robert (South Ribble)
Howells, Geraint


Beaumont-Dark, Anthony
Hunt, David (Wirral W)


Bellingham, Henry
Hunter, Andrew


Best, Keith
Jackson, Robert


Bevan, David Gilroy
Jenkin, Rt Hon Patrick


Boscawen, Hon Robert
Johnston, Sir Russell


Brandon-Bravo, Martin
Jones, Gwilym (Cardiff N)


Bright, Graham
Jones, Robert (Herts W)


Brittan, Rt Hon Leon
Kellett-Bowman, Mrs Elaine


Brown, M. (Brigg &amp; Cl'thpes)
Kennedy, Charles


Browne, John
King, Roger (B'ham N'field)


Carlile, Alexander (Montg'y)
Kirkwood, Archy


Carlisle, Rt Hon M. (W'ton S)
Knight, Greg (Derby N)


Carttiss, Michael
Knox, David


Clark, Dr Michael (Rochford)
Lang, Ian


Clarke, Rt Hon K. (Rushcliffe)
Lawler, Geoffrey


Colvin, Michael
Lawrence, Ivan


Coombs, Simon
Lee, John (Pendle)


Cope, John
Leigh, Edward (Gainsbor'gh)


Cranborne, Viscount
Lennox-Boyd, Hon Mark


Dorrell, Stephen
Lloyd, Peter (Fareham)


Douglas-Hamilton, Lord J.
Lord, Michael


Dunn, Robert
Macfarlane, Neil


Durant, Tony
MacKay, Andrew (Berkshire)


Emery, Sir Peter
MacKay, John (Argyll &amp; Bute)


Favell, Anthony
Maclean, David John


Fletcher, Alexander
McNair-Wilson, M. (N'bury)


Forsyth, Michael (Stirling)
Major, John


Forth, Eric
Malins, Humfrey


Franks, Cecil
Marland, Paul


Fraser, Peter (Angus East)
Marlow, Antony


Freeman, Roger
Maude, Hon Francis


Gale, Roger
Mawhinney, Dr Brian


Gardiner, George (Reigate)
Maxwell-Hyslop, Robin


Gardner, Sir Edward (Fylde)
Meadowcroft, Michael


Garel-Jones, Tristan
Mellor, David


Glyn, Dr Alan
Merchant, Piers


Gorst, John
Montgomery, Sir Fergus


Gower, Sir Raymond
Moore, Rt Hon John


Hamilton, Neil (Tatton)
Morris, M. (N'hampton S)


Hampson, Dr Keith
Morrison, Hon C. (Devizes)


Hancock, Michael
Morrison, Hon P. (Chester)


Hanley, Jeremy
Moynihan, Hon C.


Harris, David
Mudd, David


Harvey, Robert
Nicholls, Patrick


Hawkins, C. (High Peak)
Normanton, Tom


Hawksley, Warren
Norris, Steven


Hayes, J.
Onslow, Cranley


Hayward, Robert
Oppenheim, Phillip


Heathcoat-Amory, David
Page, Richard (Herts SW)


Heddle, John
Pawsey, James


Henderson, Barry
Peacock, Mrs Elizabeth


Hickmet, Richard
Penhaligon, David


Hicks, Robert
Pollock, Alexander


Hirst, Michael
Portillo, Michael


Holland, Sir Philip (Gedling)
Powley, John





Prentice, Rt Hon Reg
Thorne, Neil (Ilford S)


Proctor, K. Harvey
Thornton, Malcolm


Raffan, Keith
Thurnham, Peter


Rhodes James, Robert
Townend, John (Bridlington)


Ridsdale, Sir Julian
Tracey, Richard


Roe, Mrs Marion
Twinn, Dr Ian


Rost, Peter
van Straubenzee, Sir W.


Rowe, Andrew
Waddington, David


Ryder, Richard
Walden, George


Sayeed, Jonathan
Walker, Bill (T'side N)


Shaw, Sir Michael (Scarb')
Wallace, James


Shepherd, Colin (Hereford)
Waller, Gary


Skeet, Sir Trevor
Wardle, C. (Bexhill)


Smith, Tim (Beaconsfield)
Warren, Kenneth


Speed, Keith
Watson, John


Speller, Tony
Watts, John


Spencer, Derek
Wells, Bowen (Hertford)


Spicer, Michael (S Worcs)
Wheeler, John


Stanbrook, Ivor
Whitfield, John


Steen, Anthony
Wilson, Gordon


Stern, Michael
Winterton, Mrs Ann


Stevens, Lewis (Nuneaton)
Yeo, Tim


Stewart, Allan (Eastwood)



Taylor, John (Solihull)
Tellers for the Ayes:


Thomas, Rt Hon Peter
Mr. Archie Hamilton and


Thompson, Patrick (N'ich N)
Mr. Michael Newbert.


NOES


Anderson, Donald
Heffer, Eric S.


Archer, Rt Hon Peter
Hogg, N. (C'nauld &amp; Kilsyth)


Atkinson, N. (Tottenham)
Home Robertson, John


Bagier, Gordon A. T.
Hughes, Robert (Aberdeen N)


Banks, Tony (Newham NW)
Janner, Hon Greville


Barnett, Guy
John, Brynmor


Beckett, Mrs Margaret
Kaufman, Rt Hon Gerald


Benn, Rt Hon Tony
Leadbitter, Ted


Bennett, A. (Dent'n &amp; Red'sh)
Lewis, Terence (Worsley)


Bermingham, Gerald
Lloyd, Tony (Stretford)


Boyes, Roland
McCartney, Hugh


Bray, Dr Jeremy
McKay, Allen (Penistone)


Brown, Gordon (D'f'mline E)
McKelvey, William


Brown, Hugh D. (Provan)
MacKenzie, Rt Hon Gregor


Brown, N. (N'c'tle-u-Tyne E)
Marshall, David (Shettleston)


Brown, R. (N'c'tle-u-Tyne N)
Mason, Rt Hon Roy


Buchan, Norman
Maxton, John


Callaghan, Jim (Heyw'd &amp; M)
Maynard, Miss Joan


Carter-Jones, Lewis
Meacher, Michael


Clark, Dr David (S Shields)
Michie, William


Clay, Robert
Millan, Rt Hon Bruce


Clelland, David Gordon
Morris, Rt Hon J. (Aberavon)


Clwyd, Mrs Ann
Nellist, David


Cocks, Rt Hon M. (Bristol S)
Patchett, Terry


Conlan, Bernard
Powell, Raymond (Ogmore)


Cook, Robin F. (Livingston)
Prescott, John


Corbyn, Jeremy
Randall, Stuart


Craigen, J. M.
Richardson, Ms Jo


Deakins, Eric
Rogers, Allan


Dewar, Donald
Ross, Ernest (Dundee W)


Dixon, Donald
Sedgemore, Brian


Dormand, Jack
Short, Ms Clare (Ladywood)


Douglas, Dick
Skinner, Dennis


Dubs, Alfred
Smith, C.(lsl'ton S &amp; F'bury)


Duffy, A. E. P.
Snape, Peter


Dunwoody, Hon Mrs G.
Spearing, Nigel


Eastham, Ken
Stott, Roger


Evans, John (St. Helens N)
Thompson, J. (Wansbeck)


Ewing, Harry
Tinn, James


Fatchett, Derek
Wareing, Robert


Fields, T. (L'pool Broad Gn)
Winnick, David


Fisher, Mark
Woodall, Alec


Flannery, Martin
Young, David (Bolton SE)


Foster, Derek



Foulkes, George
Tellers for the Noes:


George, Bruce
Mr. Allen Adams and


Hamilton, W. W. (Fife Central)
Mr. James Hamilton.


Hattersley, Rt Hon Roy

Question accordingly agreed to.

Subsequent Lords amendments agreed to.

New Clause

REMOVAL OF RESTRICTION ON SECURITY OF TENURE

Lords amendment: No. 6, after clause 9, insert the following new clause:
A — In Schedule 1 to the 1980 Act, paragraph 1 (tenancy not to he secure tenancy if for period exceeding 20 years) shall cease to have effect.

8 pm

Mr. Ancram: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker (Mr. Ernest Armstrong): With this it will be convenient to take Lords amendments Nos. 13 and 14.

Mr. Ancram: The purpose of amendments 6 and 14 is to repeal paragraph 1 of schedule 1 to the Tenants' Rights Etc. (Scotland) Act 1980. This paragraph provides that the tenancy shall not be a secure tenancy, and therefore the tenant shall not have the right to buy, if it is for a period of more than 20 years. The effect of the present amendments is that tenants who have such long leases will in future be secure tenants and will enjoy the right to buy, no matter whether they entered into the long lease before or after the date the Bill comes into effect.
The amendment clears up the confusion which existed earlier for tenants in the Central region. Earlier in the year, we learnt that the Central regional council was seeking to persuade its tenants, who presently do not have security of tenure, to enter into 21-year leases or to buy their property at a 10 per cent. discount. It was clear that by this means the council hoped to prevent tenants being given security of tenure and the right to buy at full discount when the Bill came into force. That would not be acceptable and the amendment makes it clear that that cannot be done.

Mr. Michael Forsyth: I thank my hon. Friend the Minister for moving the amendment, which will affect a number of my constituents. I believe that the Central regional council, in seeking to persuade its tenants either to buy their properties at a 10 per cent. discount or to enter into a 21-year lease, was involved in a thoroughly cynical and reprehensible act, which caused considerable concern and upset to tenants. We hear from some sections of the Labour party that they are not opposed to the right to buy, but on this occasion the Central regional council did everything possible to remove that right from its tenants. This was thoroughly disgraceful and considerable distress was caused. I am grateful to my hon. Friend for the speedy way in which he has acted. I am delighted to be able to convey to him considerable gratitude from my constituents who will benefit from the amendment.

Mr. Maxton: We shall not oppose the amendment, but I do wish that the hon. Member for Stirling (Mr. Forsyth) would stop parading his vindictive prejudices against the Central regional council.

Question put and agreed to.

Subsequent Lords amendment agreed to. [Special Entry.]

New Clause

FUNCTIONS OF LOCAL AUTHORITIES WITH RESPECT TO PERSONS WHO ARE HOMELESS OR THREATENED WITH HOMELESSNESS

Lords amendment: No. 8, after clause 19, page 18, line 15, at end insert new clause B—
B.—(1) The Housing (Homeless Persons) Act 1977 shall be amended in accordance with the following provisions of this section.
(2) In section 1(2) (homeless persons and persons threatened with homelessness) after paragraph (c) there shall be inserted the following paragraph—
(d) it does not provide the ordinary facilities of a residence and it is inappropriate for his needs, or it is unreasonable for him to continue to live in it.
(3) In section 4 (duties of housing authorities to homeless persons and persons threatened with homelessness) after subsection (6) there shall be inserted the following subsection—
(7) Where a local authority has a duty under subsections (4) and (5) above "accommodation" shall he defined as either—

(a) a separate dwelling house that shall not be overcrowded as defined in section 89 of the Housing (Scotland) Act 1966 and shall meet the tolerable standard as defined in section 14 of the Housing (Scotland) Act 1974, or
(b) in exceptional circumstances where a separate dwelling house as defined in (a) above is not appropriate to the needs of an applicant accommodation that is appropriate and reasonable in all the circumstances.""

Mr. Ancram: I beg to move, That this House doth disagree with the Lords in the said amendment.
This is not the first time that the judgment of the Law Lords in what has come to be known as the Puhlhofer case has been debated during the consideration of the Bill.
Hon. Members will recall that when this matter was first raised, when the Bill was discussed on report in March, I indicated that I would wish further time to take advice and to assess the implications of the Law Lords' judgment, but that I intended, along with my colleagues in the Department of the Environment, to give the matter careful consideration. In the following weeks, we looked very carefully into the implications of the judgment and in the light of the amendment passed in another place we have further reviewed this matter.
We concluded that the judgment of the Law Lords accurately reflects the effect of the Act and what we understand to have been the intention of Parliament on two main points. These are, first, that a local authority has discretion to reach a view on whether an applicant is homeless, taking account of the accommodation available to him. Secondly, where an authority accepts that an applicant is homeless and that it has a duty to secure accommodation for him, the authority again has discretion to decide what sort of accommodation is appropriate, having regard to the code of guidance issued by my right hon. Friend the Secretary of State. That was the position before the Law Lords' judgment; and it is the position today.
We have concluded, therefore, that the suggestion that the homeless persons Act needs to be amended is premature. We have, however, offered to keep the position under review, and if it can be demonstrated, over the coming months, that local, authorities are taking a substantially different approach to the discharge of their responsibilities to homeless people under the Act as a


result of the judgment, we would be prepared to reconsider the matter. I have to emphasise that we have no evidence so far to support the claim that the decision in the Puhlhofer case is having an adverse effect on the prospects of homeless people who apply under the Act.

Sir Russell Johnston: The Minister has said that if the behaviour of local authorities could be demonstrated to have changed, he would be prepared to reconsider the matter. Presumably that means that he would be prepared to reconsider legislation. The reality is that the opportunity of introducing the relevant legislation is with us now. I fear that the Minister has not explained to the House what disadvantage will stem from making a change now.

Mr. Ancram: I shall turn in a moment to the amendment from another place that we are considering. When I last addressed the House on this issue on Report, I said that my view, which was based on advice that I was being given, was that in practice the judgment would not change the way in which local authorities operated in practice. I have given considerable further consideration to the matter. I have taken advice and I have consulted my colleagues in the Department of the Environment. It remains the Government's view that there is nothing to the contrary in what is happening, so far as we know, in Scotland or England to suggest that our view is wrong. We do not believe that the judgment has affected the way in which local authorities will act in practice. It does not have an effect upon the guidance given by the Secretary of State under the code of guidance and I have no intention of reconsidering the matter.
The amendment is unnecessary for the reasons which I have set out and I believe that it is dangerous. In the first place, it would give rise to severe difficulties of interpretation. Secondly, in spite of the claims that the amendment seeks only to restore the position to that obtaining before the Puhlhofer judgment, it will in fact impose substantial new duties on local authorities, and for that reason the amendment cannot be allowed to stand.

Sir Russell Johnston: New duties such as what?

Mr. Ancram: The hon. Gentleman asks, "New duties such as what?" from a sedentary position. Subsection (2) of the new clause provides that a person shall be homeless if he has accommodation which
does not provide the ordinary facilities of a residence".
No definition is provided, however, of what is meant by that and the other phrases that are used. In my view, they are not capable of being so defined. It would be left to the local authority to interpret the phrase as it saw fit. One can imagine the scope that could arise for litigation as a result.
Secondly, subsection (3) seeks to go beyond the present provisions of the Act by making mandatory what is at the moment advice contained in a code to which authorities must have regard. There are two points to consider, the first being what the amendment actually does, which is to define what accommodation will count as fulfilling an authority's duty. If an authority placed a homeless family in other accommodation — for example, bed and breakfast—it would not have fulfilled its duty and could be open to applications for judicial review.
This is quite different from the present position, where an authority would be fulfilling its duty by placing the

applicant in bed-and-breakfast accommodation, but must have regard to the code of guidance which says that that should be used only as a last resort, and even then as a temporary measure. There will inevitably be circumstances in which authorities have to provide temporary accommodation for an initial period.
The amendment stresses the need to provide permanent accommodation and this is, I suspect, its main purpose. The code asks that permanent accommodation should be secured as soon as possible, but I believe that we should think carefully before extending local authorities' duties in the way that the amendment envisages. The implications for local authorities could be severe.
I accept that in carrying the amendment the other House acted with the best of intentions, but the Law Lords' judgment is not having the dire consequences that it fears. To amend the Housing (Homeless Persons) Act in what I believe is a hasty and ill-thought-out way is not justified on the basis of the evidence that is available to us and could have unforeseen and damaging consequences. We are proposing a much more measured approach of monitoring the position to see what, if anything, happens, and then to bring forward carefully considered amendments both for England and Scotland if they prove to be necessary. I believe that that is a much more sensible way in which to proceed and on that basis I ask the House to reject the amendment.

Mr. Dewar: It is always tempting streckly to accept any occasions when the Minister defends local authority discretion. That is not usually a virtue of which he approves. Therefore, I am sorry that I have to be a little sceptical and ungrateful on this occasion.
This is an amendment of some importance. In a sense, it is another round in a running battle which has been, to use an appropriate adjective, nobly maintained, largely in another place, and has been hard fought at almost every stage.
I should make it clear that, apart from the parliamentary activities, there has been some excellent briefing from outside the House, particularly from Shelter, which has a close interest in the matter. Some of the points I am about to make are based on information that that organisation has supplied. I think that it has the best of the argument and it is correct that this should be put before the House.
I moved an amendment on Report on 4 March and the Minister has referred to that debate. I want briefly to rehearse the argument. It all goes back to Lord Brightman's judgment in February 1986 in the Puhlhofer case versus the London borough of Hillingdon. In that case there was judicial consideration of the meaning of the word "accommodation" in the Housing (Homeless Persons) Act 1977.
The facts were simple and I do not need to detain the House long on them. It was the case of a young couple who were applying for help under the Housing (Homeless Persons) Act. They were put into bed-and-breakfast accommodation and the husband, his wife and two young children occupied one room which was inevitably cluttered with a double and a single bed, a dressing table and the various items of equipment that are needed for a small family. The council argued that that was adequate accommodation and that the couple were not homeless because they were being housed in those circumstances.
The merits or otherwise of that particular argument were not decided by the court. Lord Brightman did not take the view that he had to decide whether the course taken by the authority had been reasonable or unreasonable. He came to the conclusion that it was entirely a matter for the authority. He made the point:
Parliament plainly and wisely placed no qualifying adjective before the word 'accommodation'.
His Lordship said that the word "appropriate" or "reasonable" is not to be imported. Accommodation is not to be disregarded as accommodation merely because it is unfit for habitation in terms of the Housing Act.
His lordship developed that argument, and his position was that there are no rules. He did not talk at great length about the code of guidance. His position was that there are no rules. The House will remember the rather picturesque phrase that he used. He said that it was a misuse of language to describe Diogenes as having occupied accommodation within the meaning of the Act, but, by implication, almost anything else would go. Therefore, however much one might sympathise with the young couple, at the end of the day, the word of the authority, however unreasonable it might seem to any outsider, could not effectively be challenged.
It seemed to Labour Members and to a large number of people outside the House, as the Minister knows, that we should make some attempt to remedy that position and to write in a definition which would allow the homeless persons provision to operate in a way that Parliament would have wished when it put the Act on the statute book. The Minister referred to the fact that he was merely doing what Parliament always intended. I did not quite follow that argument, but, in any event, none of us wanted the Housing (Homeless Persons) Act to be operated unfairly. The vast majority of local authorities do not want to operate it in a way that is ungenerous or in such a way that the safety net is a particularly uncomfortable temporary resting place.
Therefore, on Report we attempted to build in one or two definition phrases and to suggest that someone was homeless if their accommodation was inappropriate to their needs, it was unreasonable for them to continue to live there, or if the accommodation did not measure up to certain statutory minimum requirements.
There was, as the Minister knows—I do not think that I am exaggerating—fairly widespread support and sympathy for that point of view. Indeed, the amendment that stood in my name was also signed by the hon. Member for Edinburgh, Central (Mr. Fletcher), who I am sorry is not here this evening. It is clear that there was all-party support. Certainly, we had the support of other parties on the Opposition Benches.
8.15 pm
The Minister himself was not unhelpful in his remarks. He made some caveats, of course. He said that he would have to look at the matter. At that stage I did not appreciate the somewhat sinister implications of his references to the need to consult the Department of the Environment. We did not force the amendment to the vote, I think wisely, and I left the debate fairly hopeful that we would see some action by the Minister. I was prepared to accept that my amendment was probably in many ways defective and might have substantial inherent difficulties that I had not thought of. But I hoped that we should see

some attempt to meet the point of the amendment in a more professional manner with the help of the Minister's considerable departmental resources.
Therefore, it was a disappointment when it became clear in subsequent proceedings in another place that the Minister's position had hardened and that he had retreated from the rather more open attitude which he had displayed on the first airing of the argument. When on 13 May the Lords debated the issue on an amendment moved by the noble Lord Mackie of Benshie, tremendous emphasis was placed on the technical difficulties of the amendment that had been put down. It is significant that in most of the debates technical difficulties have always been advanced. When, finally, it was debated on 11 June in another place, the Minister, the noble Lord Gray of Contin, although he accepted that the matter had aroused the conscience of the House, went on to advance a number of arguments, at which I want to look briefly, which have been largely repeated by the Minister today.
The first and basic argument was that the whole matter was premature—the Minister used that word again a few minutes ago—and that there was no evidence of abuse of any kind. There are different degrees of enthusiasm for the Housing (Homeless Persons) Act. My local authority in Glasgow has an excellent record and has tried hard to give the cover envisaged in the Act. But there is some evidence that those variations can be worrying and that there are different approaches in different parts of the country.
The very fact that the Puhlhofer case emerged and has re-written—or rather almost unwritten—the Act would be a case for action. Given the measure of latitude which has been introduced, it should at least sound off some warning bells, to which the Government should listen.

Mr. Henderson: The hon. Gentleman has perfectly fairly made the point that local authorities have been trying to operate the Housing (Homeless Persons) Act. It has had slightly different effects in different parts of the country but he is right to say that there has been a genuine attempt to work the Act. None the less, he will also agree that local authorities have had difficulties in working that Act. That is why I would ask him to consider at this point whether this is a sensible time to make further difficulties and to change the ball game of the Act when local authorities are still feeling their way for dealing with the Act as it now is before we amend it. We should find positive reasons in Scotland for changing the Act at this stage rather than simply go along with something that has happened in England which may not be relevant.

Mr. Dewar: I understand that argument. It is perfectly fairly put by the hon. Gentleman. I suspect that it would be a good argument for not having a 1977 Act at all. If I remember the history of the legislation, many people argued at the time that, however desirable it was, it was an unreasonable burden, given the problems of the housing stock and that therefore we should not legislate.
The judgment of Lord Brightman means that a massive gap has opened up and it is only right that we should try to put in some minimum standards which will greatly bolster the statute and return us to something like the position that I imagine we were in in terms of the code of guidance. The code of guidance was helpful. It is still there, but is now in doubt because the House of Lords, which is


persuasive in Scotland in any judicial proceedings, even if not binding, has taken this much more lax approach to the duties of local authorities.
I shall ask the Minister a specific question that he can deal with when he is winding up. It is about the monitoring. The Minister and the noble Lord Gray of Contin have said that the Government will monitor using their regular quarterly statistical returns from the various housing authorities. I am not familiar with these forms but I think that form HL1 is relevant.
My information is that it is extremely difficult to monitor on the basis of the information contained in the forms. In order to monitor, one might need to know the number of people who had been refused on the grounds that they were not properly homeless and the other reasons why they had been refused. At the other end of the process it would not be enough merely to record the number of people placed in accommodation under the Act. One would also need to have information about the nature of the accommodation and its standard. I am advised by people who work in housing that there is at least a lot of professional scepticism about whether the present forms cover such matters. I should like the Minister to deal with that point, to explain how the monitoring will work and to say whether it is sensible and directed in a way that will deal with the point about standards which is at risk here.
The other arguments that the Minister used against the amendment were that it would be pushing us not back to the status quo, but into a different and undesirable position. I am not sure that that is true. He suggested that if, for example, a local authority put a family into bed and breakfast accommodation as a temporary measure, the authority would be failing in its statutory duty if the amendment were accepted in its present form and might be subject to judicial review and find itself in trouble in the courts.
The Minister would prefer to leave the situation as it is and run the risk of Lord Brightman's interpretation of the present Act. A lot of the information and advice that I have received would dispute that concept, and the Minister is not on safe or sure ground. However, let us suppose for the moment that he is and that there are problems of the kind that he has described. That is a case for the Minister coming forward with his own amendment to meet the point that we are striking at but which avoids some of the dangers that he spies in the form of words that the other place has inserted in the Bill.
Most of the arguments about the difficulties of definition are specious. The Lord Gray of Contin said that the phrase in the Tenants' Rights Etc. (Scotland) Act 1980
reasonably suitable for the needs of a tenant
had taken half a schedule to define . I have no doubt that there are a great many examples of cases where a good deal of work has gone into statutory definitions. If we read any piece of housing legislation or even the Housing (Homeless Persons) Act 1977 itself we will see many instances where terms like "reasonable" or "appropriate for needs" are used and yet do not seem to have resulted in the kind of difficulties spoken about by the Minister. My attention has been drawn to section 14 of the Housing (Scotland) Act 1974 as an example of exactly the kind of phraseology that is well established in the statute book.
I hope that Shelter will not mind me saying this, but I understand that it has taken legal advice in Scotland and in

England. A number of the people consulted are familiar to me and I suspect that they would be even more familiar to the Minister. In England, Shelter consulted Mr. Robert Carnwarth, a silk who has written a standard book on the Housing (Homeless Persons) Act. He takes a different view from that of the Minister and said that the difficulties that had arisen from the failure to define accommodation in the Act were very considerable. I am not saying that we should stand or that we would have wanted to stand on this definition if the Minister had produced a better alternative. However, I am certainly not prepared to recommend to the House that we fall into line and abandon the whole enterprise as the Minister is inviting us to do.
I am sure that the Minister has read the debates in another place. In the past, the noble Lord the Earl of Selkirk was not unconnected with the Conservative party, although he seems to plough a somewhat independent furrow nowadays. That is to his credit. I think he spoke for noble Lords in all parts of the other place when he said that there was an overwhelming feeling that if there were practical difficulties the Government had a duty to bring in their own version. He said that that was what the other place wanted and that it was an almost unanimous feeling.
The Minister prayed in aid the noble Lord? Wilberforce as the only respectable prop to his attack on the amendment, but if one reads what the noble Lord said during the debate in the other place one will see that, although he had some caveats about the form of the amendment, he made it clear that he supported it. That would seem to suggest that the Minister was reading isolated parts of the debate.
It is disappointing that the Minister has not come forward with something to satisfy the wish to remove the evident dangers arising from the judgment which we have been discussing and which has dominated this argument about housing policy. I am sorry to say that to some extent we can see in this matter the dead weight of the Department of the Environment. I suspect that the new Secretary of State is antipathetic to the spirit of the Housing (Homeless Persons) Act 1977 and probably regards it as dangerous welfarism of some sort.
In Scotland we have a different legal tradition and system and, if I may say so, a different housing system and tradition. There is no reason why we should stay in step with the Department of the Environment. There is a case for the Scottish Office showing a little bit of smeddum and going its own road on this occasion. We should not take, as we are being asked to do, the line of least resistance and wait for some substantial evidence of scandal or abuse before we act. That is the approach the Minister recommends.
The legal consequences of the decision in the Puhlhofer case will be far-reaching. My attention has been drawn to one decision, admittedly English but interesting, involving the London borough of Wandsworth ex parte Lindsay in which the judge, Mr. Justice Simon Brown, made it clear that the law would have to change because of the Puhlhofer decision. He said:
Although hitherto it has been accepted, in particular following the Court of Appeal decision in Part v Wyre Borough Council, that in order to properly discharge the duty under section 4(5) the accommodation offered must be appropriate, Puhlhofer makes plain that this is not so. On the contrary accommodation within the meaning of the Act, whether for the purposes of section 1, section 4 or section 17


—and there may well be other relevant sections—need only be premises properly so describable even if in certain respects they are unfit, inadequate or otherwise unsuitable.
He felt that he had no option but to refuse to consider the facts which at least prima facie deserved consideration on the grounds that even if—I repeat the point—the accommodation was "unfit, inadequate or otherwise unsuitable" it was still accommodation under the Housing (Homeless Persons) Act 1977 and that was the end of the argument. If that is the decision taken by the courts, admittedly in England, relying on a House of Lords judgment which will be persuasive in Scotland, the code of guidance that the Minister relies upon is likely to be only a thin protective screen against that kind of legal action.
If the courts feel that they have to take that attitude, we should protect them from their own purism by trying to write into the Act the safeguards that the amendment represents. We are in difficulty because there may well be arguments against this form of words. However, we are in the unfortunate position that they are the only form of words we have because there is no way in which we can further amend, and the Government have declined to help us.
We cannot allow this matter to rest here and accept the Minister's advice. He said that he was taking "the more measured approach." I suspect that will amount to a do-nothing approach; there is a good deal of simple cosmetic camouflage in all the talk of monitoring and further legislation if it proves necessary. If we do not do something now and keep the pressure on, I suspect that we will sell the pass on the matter of importance. On that basis, I invite the House to agree with the Lords in the amendment.

Sir Russell Johnston: The House is greatly indebted to the hon. Member for Glasgow, Garscadden (Mr. Dewar) for the clarity with which he has put a strong case. We are all disappointed that the Government have not responded either here or in the other place to the arguments which have been rehearsed several times.
As the hon. Gentleman said, the amendment in the other place which was carried was moved by my hon. Friend Lord Mackie of Benshie. That was particularly appropriate as the original Act was taken through the House by my hon. Friend the Member for Isle of Wight (Mr. Ross). It was a private Member's measure with all-party support, but, obviously, the Liberal party has always felt that it has a special responsibility for it.
8.30 pm
The hon. Gentleman has rehearsed the arguments thoroughly and I do not wish to be repetitious. However, I should like to re-emphasise one or two points. The hon. Gentleman said, correctly, and any objective observer would agree, that the argument has been won by those anxious to correct the position created by the Puhlhofer judgment which, to use the words of the hon. Member for Fife, North-East (Mr. Henderson) in a different context, has changed the ball game. The judgment, not the amendment, has changed the ball game.
The arguments advanced by the Minister of State in the other place, Lord Gray of Contin, and repeated by the Minister tonight were characterised by Lord Mackie as inadequate. He described the idea of monitoring as a method of procrastination, and the hon. Member for Garscadden repeated that. One must admit that technical and legal arguments are perhaps the most difficult for hon.

Members to deal with. Time and again we hear the Minister say, "The hon. Gentleman may intend such and such by the words, but the consequence will be different."
However, we have the advantage that Shelter has given considerable, detailed legal and technical attention to the arguments advanced originally in another place and reiterated by the Minister this evening. It is not the case that the amendment is unworkable.
That is the considered legal view, not only of Robert Carnwath, but of Jonathan Mitchell and Paul Watchman, a lecturer in law at Dundee university. Moreover, they are willing to be quoted as expressing that view. They are noted experts in their own right on the Housing (Homeless Persons) Act 1977, and they all agree that the amendment is workable, and deny that the amendment uses terms which are ill-defined. It has already been said that the Housing (Scotland) Act 1974 uses the words "tolerable standards" acceptably. All three experts agree that it is not the case that bed and breakfast accommodation would be ruled out. The Minister touched on that argument. Nor does the amendment return the position to the status quo which was that accommodation should be "reasonable". That was the judgment of Brown, and a family such as the Puhlhofers would be considered homeless. The amendment passed in the Lords does not go beyond that.
The amendment provides for homeless people to be housed by local authorities in accommodation which meets the tolerable standards and overcrowding standards laid down by law. It does not go beyond the code of guidance, and, perhaps, it does not provide very exacting standards. It does not stop local authorities providing a better than minimum standard. Indeed, if I may be permitted to come near to a quotation of my noble Friend, Lord Mackie, he made it clear in another place that even he would find the guidelines reasonably easy to follow.

Mr. George Foulkes: Will the hon. Gentleman speak up?

Sir Russell Johnston: Is the hon. Gentleman going deaf already? I do not wish to tire the patience of the House by repeating what I have said, so I invite the hon. Gentleman to read my speech as I know that the Hansard reporters have good hearing. I am interested to know that a reason why the hon. Gentleman frequently makes his speech in a loud manner is that he does not even hear himself well.
Finally, it is alleged that the amendment does not define the exceptional circumstances effectively and properly, but the view is that the words are rightly used in social security law and that they do not represent an insuperable obstacle.
It is rare for Governments to change their minds, and to do so at the last moment of the 11th hour is exceptional. I cannot even think of an example. However, I suggest most seriously to the Minister that the arguments expounded in the other place and here both on Report and tonight from the hon. Member for Garscadden make a good case. Even if the Minister is right that so far the consequences of the Puhlhofer judgment have had no marked effect, we now have the opportunity to ensure that they never will. Surely that is desirable, particularly if the Government's objections appear, in the view of experts and persons skilled in the law and the interpretation of the Act, not to have legal substance.

Mr. Gordon Wilson: When one relies on common briefings there is a danger of repetition and that the same speech will be made repeatedly. As the lead


speech given by the hon. Member for Glasgow, Garscadden (Mr. Dewar) was so clear, perhaps the best thing to do is, to use the legal vernacular, to say "I concur". However, I wish to add some points.
By seeking to overturn the House of Lords decision, the Minister has put himself in a dangerously isolated position. If things go wrong and local authorities do not accept the spirit of the guidelines, people will remain homeless and the Government and the Minister personally will have to accept responsibility. It is a pity that the Minister has not adopted the advice given by the Earl of Selkirk who said that he supported the amendment so that the Government could think again. I am probably going beyond his argument, but I am sure that the noble Lord wanted a form of words which the Government could table with the confidence that there would be no observable legal loophole.
Governments are not necessarily right about legislation and there are plenty of examples where Governments have been proved wrong, if anything, sometimes a long period after the event. In this instance, the legislation was passed in 1977 and now, nine years later, their Lordships, in their appellate capacity, have blasted a vast hole in the middle of the Act. It is discouraging and disappointing that in a sense the Government have gone back to the attitude adopted in the mid-1970s and before, that legislation was not necessary. The Housing (Homeless Persons) Act was carried through by a Back Bencher who was successful in the ballot. I recollect that at the time it was argued that it would be dangerous to legislate to deal with the problem of homelessness and that this would be far better left to guidelines to be issued by the Department of the Environment or the Scottish Office as those would be followed by local authorities.
There is no doubt that where particular problems develop local authorities may seek to get around the guidelines, and if there is no legislative back-up they will be perfectly free to do so. If an abuse occurs, we shall probably find that months, if not a year or more, will elapse before the slow-moving juggernaut of Government grinds into action and produces legislation. It is not always the case that a legislative vehicle is handy at the given time. If such a vehicle does not exist, hardship could be caused by the failure to take account of the changes that have been made in the law.
I cannot understand the Minister's reasoning. On the one hand, it seems that he is saying that there is no need to act because in effect the law has not changed—that Puhlhofer is the latest interpretation of the Housing (Homeless Persons) Act and he does not think that the changes that have been made by Puhlhofer so upset the law in relation to homelessness as to require himself or his Department to intervene with the legislation. On the other hand, he is indicating that, should problems emerge over a period of time, his Government will act. That is his excuse for action in the future.
I take the view that the Puhlhofer judgment in effect drives a huge gap in the homelessness legislation. In particular, one must look at the decision of Brown v. Hamilton district council, where Lord Wheatley said in the Court of Session:

I reject the argument that as long as accommodation was available it did not matter what the nature of the accommodation was. In my view it must be reasonable in all the circumstances".
He went on to make the interesting and picturesque statement that:
A pigsty might be accommodation but not reasonable accommodation.
No doubt he extended the argument as far as it would go, and while it would seem that Lord Mackie was conversant with very comfortable pigstys, he declared that he would not want to live in them.

Mr. Foulkes: He is a black sheep.

Mr. Wilson: I wish that the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) would not treat this serious subject with such levity. If the hon. Gentleman has come in late from dinner, perhaps he will be quiet and allow the House to deal with this matter. He may not be homeless, but other people are. He should address himself to the House by speaking if he so wishes, but in the meantime I would be grateful if he would haud his wheesht.
8.45 pm
I contract what was said in Brown v. Hamilton district council with the judgment by Lord Brightman, where the word "reasonable" is effectively taken out. Either accommodation is reasonable or it is not. Puhlhofer says that it does not have to be—an extremely persuasive judgment. Indeed, it is one that local authorities could legitimately follow. I take the view that the rights of people who are homeless have changed, whereas before the Puhlhofer judgment those who were in that unfortunate situation had a right to be rehoused. It now boils down to the fact that they will be rehoused at the discretion of the local authority. That is a very dangerous development.
It is always the last resort of a Minister who is bankrupt of arguments to attack an amendment not on the basis of the argument but on its possible defects. I take this opportunity of congratulating Shelter on going to the exceptional trouble of taking legal advice. It had the arguments that were put to the other place on behalf of the Government by Lord Gray outlining the attack on the amendment. Shelter has given good, persuasive and sound reasons why the defects as seen by the Government do not exist. The Minister's attitude is completely unsupportable.
If one looks at the advice that has been given, it seems perfectly clear that the amendment can serve the purposes for which it is designed. The Minister took objection to the fact that a piece of guidance at present in the guidelines was now being imported into statute. There is nothing reprehensible in such a practice. It has been proven that the guidelines will work if they have been observed and are backed up by statutory authority. Therefore, there is no reason why the guidelines should not be rephrased and set in statutory form.
There are many cases in which advisory guidelines have subsequently been made law. The change made in this amendment is perfectly acceptable. At the end of the day, the problem is that the Government have been given a chance to make a perfectly reasonable change in legislation and to make it accord with the views of the Scottish public and the vast majority of Scottish Members of Parliament. But, as the hon. Member for Garscadden said, they have refused to take up that opportunity, largely as he suspected — and as I suspect—because they have been told not to


do so by the lead Ministry, the Department of the Environment. Here was a chance for this Minister and the Scottish Office to show that they had some autonomy. By that standard they have failed the test.

Mr. Hugh Brown: I shall be brief. I say that because I was interested when my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said that he would make a brief speech. It was such a speech in accordance with what he thinks is a brief speech. Nevertheless, I am on the same side.
I have listened to the Minister, to my hon. Friend and to two contributions from the same stable. I suffer from the advantage of not having received the brief. Therefore, I am not confused. You, Mr. Deputy Speaker, must be interested in this debate, because you and I were the perpetrators of all the difficulties that apparently are now to be corrected. Therefore, to some extent I cannot help having some sympathy with the Minister, although I shall not overdo it. I listened to the Secretary of State for Scotland's cheap comments in Edinburgh on Monday about poor attendance. I wonder what he would think about today's attendance. This is peak viewing time and also peak eating time. I will not make any apologies but it does not do us justice or credit to have such a poor attendance for Scottish business.
No doubt we shall lose this amendment. I am not 100 per cent. convinced that the amendment is necessary. However, when a Minister gives an undertaking that he will conduct a thorough review, I believe that that is what he means. If legislation is necessary—and we will not win the vote on this amendment — I hope that the Minister will tell us when he replies how he intends to conduct the review.
I am in favour of local authorities having discretion. I am not convinced that further legislation and definition is necessarily the right way to proceed. I must be cautious about this. I want an assurance from the Minister that the review will be thorough and that he will tell COSLA, Shelter and any other council for the single homeless that he will monitor what happens. He must disabuse us of any idea that there is a plot on the part of the DOE.
As you know, Mr. Deputy Speaker, the DOE is a very powerful Department. However, although there was much argument when the original Bill went through the House about cross-border problems, I do not believe that this is a major cross-border problem. I cannot believe that droves of people will flock to Scotland simply because there is a slightly different interpretation of the law in Scotland, which, according to the Minister, is not really a difference of interpretation. I hope that that is not a suspicion that would carry much weight.
This is not an easy matter to resolve. The Minister said that this could impose substantial new duties on local authorities. If that is the case, new duties mean more money. Unfortunately the Government will not receive cooperation from the housing authorities, which are hard pressed. That is further evidence of a suspicion that the Minister is putting up the case because he is not willing to find the additional resources that would be required if that meant an imposition of substantial new duties.
I hope we shall receive an assurance that the review will be thorough. I hope that we say with some confidence that if changes are needed in legislation the Opposition will cooperate to that end.

Mr. Ancram: We have had a useful debate on this important subject. It has become clear, and I am sure that the hon. Member for Glasgow, Provan (Mr. Brown) will have noticed, that there are two distinct and different views of the Puhlhofer judgment on both sides of the House. There is the view which I had expressed, that the judgment in practice will make no difference to the operation of the Act by local authorities in Scotland. The other view was expressed most forcibly by the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) who stressed that his noble Friend Lord Mackie of Benshie was anxious to correct the new position created by the judgment. The hon. Member for Inverness, Nairn and Lochaber said that the judgment had changed the ball game and the hon. Member for Glasgow, Garscadden (Mr. Dewar) said that the judgment had unwritten the Act. That is the point of difference.
It is my view and the view of those who advise me—and I must tell the hon. Member for Dundee, East (Mr. Wilson) that I did listen to Lord Selkirk and I considered the matter after the House of Lords decision—that the Puhlhofer judgment has not unwritten the Housing (Homeless Persons) Act 1977. I tried to make it clear earlier that the Law Lords judgment has not changed the statutory position nor Parliament's intention. I have dealt with that in some detail. Nor will the code of guidance which local authorities must have regard to within the statute be changed. I believe that the code is not in doubt.
Different views may be expressed about the effects of the judgment. However, my view and the Government's view are based on careful consideration and advice. To that extent, I return to my earlier argument that there is no factual evidence for the Opposition's argument that the whole practice will be changed by the judgment. It is my experience as a Minister who has dealt with a number of such Bills — and as a constituency Member of Parliament — that where things are happening on, the ground—if I may use that expression—there is usually no lack of anecdotal evidence about it. There are always examples of something that has gone wrong, either from people coming to a constituency surgery to complain or from reports from certain agencies which, hearing about certain cases, report them to hon. Members or to the Government. From the Government's point of view—and no further evidence has been adduced tonight — there is no evidence to suggest that the fears expressed in another place and here tonight are real.

Sir Russell Johnston: In making an assessment as to whether a legal view is correct before there is any practical effect, would the Minister accept that all one can do is consult people who judge themselves to be experts in that area? The alliance has quoted at least three people who have expressed it as their professional opinion that the Puhlhofer judgment changes the law. The Minister has said that there is no evidence for that. Surely that is evidence of some sort, is it not?

Mr. Ancram: It is my view, which is based on advice, that that is not the case. I do not suggest that alliance Members have received had advice but in this instance my view, which I have taken on good advice, does not conform with theirs. Had it conformed, I would have had to examine the code of guidance. I do not wish to trouble the House again with the code of guidance but it is worthy of consideration. Hon. Members who consider the code


will discover that their anxieties are covered there. Within section 12 of the 1977 Act, the local authorities must have regard to the code. I am satisfied that the code of guidance does not need altering in the light of the Puhlhofer judgment.

Mr. Henderson: There have been several complaints about local authorities which have not been helpful and which have positively obstructed the right to buy. Has my hon. Friend had any complaints about local authorities refusing to pay attention to the guidance to which he has referred?

Mr. Ancram: I do not want to mislead the House and give a categoric yes or no to that. However, in the light of the fears expressed since Puhlhofer, I have had no evidence that that judgment has altered the way in which local authorities are operating the 1977 Act.
The hon. Member for Garscadden asked about monitoring. I repeat this point to the hon. Member for Provan, that I have offered to keep the situation under review. If it can be demonstrated over the coming months that local authorities are taking a substantially different approach to the discharge of their responsibilities, I would have to reconsider the matter. In other words, I wish to monitor the situation closely and if significant evidence suggests that my view is wrong I shall wish to reconsider it. I say that quite openly.
To answer the hon. Member for Garscadden, we shall monitor the situation through the regular quarterly statistical returns submitted to the Scottish Development Department by district authorities. Those returns, known as the homeless household case returns, show the number of applications made to the authorities under the Housing (Homeless Persons) Act and the number accepted as homeless or potentially homeless. If, as has been alleged, the Law Lords decision is likely to encourage authorities to conclude that a number of applicants are not homeless, that would be clear from those statistics. When an authority accepts a responsibility towards an applicant, the statistical returns also show the type of accommodation secured for the applicant. Again, therefore, if the Law Lords decision encourages authorities to place a larger number of applicants in short-stay accommodation and bed and breakfast lodgings, this will show up in the statistics.
9 pm
We shall, of course, consider any evidence that Shelter or other organisations wish to submit arising primarily from detailed knowledge of individual cases at local level obtained through their housing advice centres. We believe that in that way we can monitor the situation closely and reach a conclusion within a reasonable period as to whether our view is correct.

Mr. Foulkes: In monitoring the quarterly statistics so far, has the Minister detected any trend for particular authorities to have especially large numbers of applicants, more than would be predicted or more than the Scottish average? In particular, has he had representations from Kyle and Carrick district council about the difficulties that it is facing in this and other matters? I refer to people coming from outwith the district, getting on to the waiting list and having to be given priority. Those problems occur not just in respect of homelessness but in other respects.

Will the Minister take account of those representations and pay particular attention to that aspect in future monitoring?

Mr. Ancram: The hon. Gentleman will not expect an immediate answer on a specific constituency matter. I will check to see what representations have been made. I am sure that we receive representations as well as statistics in this area. At the moment, however, I am trying to identify for the hon. Members for Provan and for Garscadden the type of monitoring that takes place and to show that it will be sufficient to determine whether our view is correct.

Mr. Hugh Brown: How will local authorities know about this judgment which is to make such a great difference to the lot of the homeless person? Will the Minister be sending out a circular? If not, how does he expect the change to arise that he intends to monitor?

Mr. Ancram: I do not believe that there will be a change. It is the Opposition who take that view. My submission has been that there will not be a change in practice. Local authorities have discretion in operating under the Act, but the code of guidance is intended to be precisely that. I shall not bore the House with a description, but it is a detailed code and it states the Government's view as to how the Act should be interpreted.
The hon. Members for Inverness, Nairn and Lochaber and for Garscadden said that the amendment would be workable. As I have said, I believe that there are two good reasons for rejecting it. First, as I have just argued, it is unnecessary. Secondly, it is dangerous because of the difficulties of interpretation. Here I disagree with the hon. Member for Inverness, Nairn and Lochaber. The words
ordinary facilities of a residence
or "inappropriate for his needs" or
unreasonable for him to continue to live in it
could all give rise to considerable difficulties of interpretation, as I am sure the hon. Gentleman will appreciate. In the first instance, it would be for the local authority to interpret those words as it thought fit. I do not believe that the amendment is good legislation or that it is necessary. On that basis, I ask my hon. Friends to disagree with the Lords.

Question put,That this House doth disagree with the Lords in the said amendment:—

The House divided: Ayes 172, Noes 110.

Division No. 243]
[9.04 pm


AYES


Alexander, Richard
Cranborne, Viscount


Ancram, Michael
Dorrell, Stephen


Atkins, Robert (South Ribble)
Douglas-Hamilton, Lord J.


Batiste, Spencer
Emery, Sir Peter


Beaumont-Dark, Anthony
Favell, Anthony


Bellingham, Henry
Forsyth, Michael (Stirling)


Benyon, William
Forth, Eric


Best, Keith
Franks, Cecil


Bevan, David Gilroy
Fraser, Peter (Angus East)


Brandon-Bravo, Martin
Freeman, Roger


Bright, Graham
Gale, Roger


Brittan, Rt Hon Leon
Galley, Roy


Brown, M. (Brigg &amp; Cl'thpes)
Gardiner, George (Reigate)


Browne, John
Gardner, Sir Edward (Fylde)


Burt, Alistair
Garel-Jones, Tristan


Butler, Rt Hon Sir Adam
Glyn, Dr Alan


Carlisle, Rt Hon M. (W'ton S)
Gow, Ian


Carttiss, Michael
Gower, Sir Raymond


Colvin, Michael
Griffiths, Peter (Portsm'th N)


Coombs, Simon
Hamilton, Neil (Tatton)


Cope, John
Hampson, Dr Keith






Hanley, Jeremy
Osborn, Sir John


Hargreaves, Kenneth
Page, Richard (Herts SW)


Harris, David
Pawsey, James


Harvey, Robert
Peacock, Mrs Elizabeth


Hawkins, C. (High Peak)
Portillo, Michael


Hawksley, Warren
Powley, John


Hayes, J.
Prentice, Rt Hon Reg


Hayward, Robert
Price, Sir David


Heathcoat-Amory, David
Proctor, K. Harvey


Heddle, John
Raffan, Keith


Henderson, Barry
Rhodes James, Robert


Hickmet, Richard
Ridsdale, Sir Julian


Hicks, Robert
Roe, Mrs Marion


Hind, Kenneth
Rost, Peter


Hirst, Michael
Rowe, Andrew


Holland, Sir Philip (Gedling)
Ryder, Richard


Holt, Richard
Sainsbury, Hon Timothy


Howarth, Gerald (Cannock)
Sayeed, Jonathan


Howell, Ralph (Norfolk, N)
Shaw, Sir Michael (Scarb')


Hunt, David (Wirral W)
Shepherd, Colin (Hereford)


Hunter, Andrew
Skeet, Sir Trevor


Jackson, Robert
Smith, Tim (Beaconsfield)


Jenkin, Rt Hon Patrick
Soames, Hon Nicholas


Jones, Gwilym (Cardiff N)
Speed, Keith


Jones, Robert (Herts W)
Speller, Tony


Kellett-Bowman, Mrs Elaine
Spencer, Derek


King, Roger (B'ham N'field)
Spicer, Michael (S Worcs)


King, Rt Hon Tom
Stanbrook, Ivor


Knight, Greg (Derby N)
Steen, Anthony


Knox, David
Stern, Michael


Lang, Ian
Stevens, Lewis (Nuneaton)


Lawler, Geoffrey
Stewart, Allan (Eastwood)


Lawrence, Ivan
Stewart, Andrew (Sherwood)


Lennox-Boyd, Hon Mark
Taylor, John (Solihull)


Lewis, Sir Kenneth (Stamf'd)
Tebbit, Rt Hon Norman


Lord, Michael
Thomas, Rt Hon Peter


Macfarlane, Neil
Thompson, Donald (Calder V)


MacGregor, Rt Hon John
Thompson, Patrick (N'ich N)


MacKay, Andrew (Berkshire)
Thorne, Neil (Ilford S)


MacKay, John (Argyll &amp; Bute)
Thornton, Malcolm


Maclean, David John
Thurnham, Peter


McNair-Wilson, M. (N'bury)
Townend, John (Bridlington)


Madel, David
Tracey, Richard


Major, John
Trotter, Neville


Malins, Humfrey
Twinn, Dr Ian


Marland, Paul
van Straubenzee, Sir W.


Marlow, Antony
Waddington, David


Maude, Hon Francis
Walden, George


Maxwell-Hyslop, Robin
Walker, Bill (T'side N)


Mellor, David
Wall, Sir Patrick


Merchant, Piers
Waller, Gary


Meyer, Sir Anthony
Wardle, C. (Bexhill)


Miscampbell, Norman
Warren, Kenneth


Moate, Roger
Watson, John


Montgomery, Sir Fergus
Watts, John


Moore, Rt Hon John
Wells, Bowen (Hertford)


Morris, M. (N'hampton S)
Wheeler, John


Morrison, Hon C. (Devizes)
Whitfield, John


Morrison, Hon P. (Chester)
Winterton, Mrs Ann


Moynihan, Hon C.
Winterton, Nicholas


Mudd, David
Wolfson, Mark


Neubert, Michael
Wood, Timothy


Nicholls, Patrick
Yeo, Tim


Normanton, Tom



Norris, Steven
Tellers for the Ayes:


Onslow, Cranley
Mr. Tony Durant and


Oppenheim, Phillip
Mr. Peter Lloyd.


NOES


Alton, David
Bermingham, Gerald


Anderson, Donald
Boyes, Roland


Archer, Rt Hon Peter
Bray, Dr Jeremy


Ashdown, Paddy
Brown, Gordon (D'f'mline E)


Atkinson, N. (Tottenham)
Brown, Hugh D. (Provan)


Bagier, Gordon A. T.
Brown, N. (N'c'tle-u-Tyne E)


Banks, Tony (Newham NW)
Buchan, Norman


Barnett, Guy
Caborn, Richard


Beckett, Mrs Margaret
Callaghan, Jim (Heyw'd &amp; M)


Benn, Rt Hon Tony
Carl Me, Alexander (Montg'y)


Bennett, A. (Dent'n &amp; Red'sh)
Carter-Jones, Lewis





Clark, Dr David (S Shields)
Leadbitter, Ted


Clarke, Thomas
Lewis, Terence (Worsley)


Clay, Robert
Lloyd, Tony (Stretford)


Clelland, David Gordon
McKay, Allen (Penistone)


Clwyd, Mrs Ann
McKelvey, William


Cocks, Rt Hon M. (Bristol S)
MacKenzie, Rt Hon Gregor


Conlan, Bernard
Madden, Max


Cook, Frank (Stockton North)
Marek, Dr John


Cook, Robin F. (Livingston)
Marshall, David (Shettleston)


Corbett, Robin
Mason, Rt Hon Roy


Craigen, J. M.
Maxton, John


Deakins, Eric
Maynard, Miss Joan


Dewar, Donald
Meadowcroft, Michael


Dixon, Donald
Michie, William


Dormand, Jack
Millan, Rt Hon Bruce


Douglas, Dick
Morris, Rt Hon J. (Aberavon)


Dubs, Alfred
Nellist, David


Duffy, A. E. P.
Patchett, Terry


Dunwoody, Hon Mrs G.
Penhaligon, David


Eastham, Ken
Pike, Peter


Evans, John (St. Helens N)
Powell, Raymond (Ogmore)


Ewing, Harry
Prescott, John


Fatchett, Derek
Randall, Stuart


Faulds, Andrew
Richardson, Ms Jo


Fields, T. (L'pool Broad Gn)
Robinson, G. (Coventry NW)


Fisher, Mark
Rogers, Allan


Flannery, Martin
Ross, Ernest (Dundee W)


Forrester, John
Ross, Stephen (Isle of Wight)


Foster, Derek
Short, Ms Clare (Ladywood)


Foulkes, George
Skinner, Dennis


Garrett, W. E.
Smith, C.(Isl'ton S &amp; F'bury)


George, Bruce
Snape, Peter


Gourlay, Harry
Spearing, Nigel


Hamilton, W. W. (Fife Central)
Stott, Roger


Hancock, Michael
Thompson, J. (Wansbeck)


Hogg, N. (C'nauld &amp; Kilsyth)
Tinn, James


Holland, Stuart (Vauxhall)
Wainwright, R.


Home Robertson, John
Wallace, James


Howells, Geraint
Wareing, Robert


Hughes, Robert (Aberdeen N)
Wilson, Gordon


Hughes, Simon (Southwark)
Woodall, Alec


John, Brynmor
Young, David (Bolton SE)


Johnston, Sir Russell



Kennedy, Charles
Tellers for the Noes:


Kirkwood, Archy
Mr. James Hamilton and


Lamond, James
Mr. Allen Adams.

Question accordingly agreed to.

Schedule 1

AMENDMENT' OF 1980 ACT

Lords amendment: No. 9: in page 21, line 37, at end insert—
() where a landlord so mentioned has at no time let (or had available for letting) more than 250 dwellings; or

Read a Second time.

Mr. Ancram: I beg to move, as an amendment to the Lords amendment, to leave out "250" and insert "100".
If the amendment were agreed to, it would be my intention to ask the House to agree with the Lords amendment as amended. I have to say that I move the acceptance of this amendment with my proposed modification with some reluctance. I believe that the problem that it is intended to deal with—that the right to buy would have some apparently harmful effect on small associations' viability—is overstated, and that its proposed rectification by straightforward exemption from the right to buy is wrong. But I recognise that there is strong feeling on the subject and I certainly do not wish to damage the prospects for new small associations.
The viability of associations, whether large or small, is secured through a variety of allowances set, and grants paid, by my Department. The allowances which are of principal interest to us here are those for management and maintenance of the ordinary stock of an association. Those allowances are set at a fixed amount per house let by an association and are designed to cover all the ordinary expenses incurred by the association in running that house. If the association loses that house, whether by sale to a sitting tenant or to another association, it no longer has that day-to-day work to do and does not therefore require the accompanying allowance. Thus, in broad terms, the association's income matches its outgoings whatever size of stock it may have.
Some evidence has reached my Department that, for associations with relatively small numbers of houses, the allowances do not meet the full costs of running the stock. The evidence requires further investigation by my Department, and more detailed discussions with the Scottish Federation of Housing Associations, but if circumstances can be shown to warrant it, I am certainly prepared to modify the allowance system to help small associations. A revised allowance system would go a long way towards protecting small associations from a number of pressures which they may come under. The loss of a house under the right to buy is, to my mind, one of the smaller and probably less frequent events likely to disturb the finances of a small association.
For that reason alone, I should prefer small associations to stay in the right to buy so that their tenants may have the same rights as other tenants of housing associations. However, I am prepared to accept that there may be some justification for an exemption for the smallest associations so that their first tentative steps are not brought to an end by the sale of one or two houses. I suggest that the size of an association above which the right to buy should apply, and always apply, should be 100 rather than 250 as at present.

Mr. Bruce Millan: If the amendment is carried, how many associations will be excluded?

Mr. Ancram: I shall come back to the right hon. Gentleman on that. I do not have the figure to hand.

Mr. Millan: Why not?

Mr. Ancram: Obviously, over the years, associations, especially newer ones, have grown. I should not wish to mislead the House by giving figures on which I was not certain. The number of 250 houses, which was put forward by way of amendment in the other place, may have been chosen because it was thought that at that point an association becomes financially stable and is able to employ its own full-time staff.

Mr. Henderson: Is it not true that, since the right hon. Member for Glasgow, Govan (Mr. Millan) left office as the Secretary of State for Scotland, the annual funding of housing associations in Scotland has increased tenfold? It is not surprising in those circumstances that individual housing associations may have grown considerably in that time.

Mr. Ancram: I am grateful to my hon. Friend. He has made the good point that, despite the Opposition's

protestations, this Government have considerably supported the housing association movement, compared with our predecessors. I am sure that my hon. Friend the Member for Fife, North-East (Mr. Henderson) is aware of the growth and diversification of housing associations. The hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) is equally aware of the growth in housing associations—initially small ones—in rural areas. We welcome that. That is one of the elements which we have considered in tabling the amendment.
If the discussions on allowances bear fruit and smaller associations make sensible provision — perhaps for sharing staff—I see no reason to exempt associations from the right to buy unless their size is below 100. The amendment would extend the right to buy to a further approximately 1,700 people. I am sure that they will welcome this as much as the tenants of larger associations. I am informed that the 1,700 difference would effectively leave 22 associations which have fewer than 100 houses. There are 33 associations which have fewer than 250 houses. Obviously, the figure of 1,700 is the difference between those two in terms of the people who will be affected.
We cannot make available to small associations the transferable discount which we know as HOTCHA. HOTCHA applies only to a tenant who is the tenant of a charitable housing association to which the right to buy does not apply. Small associations are not necessarily charitable, and thus the tenants of these associations cannot he given the transferable discount which we hoped would be some small recompense for being denied the right to buy.
I cannot amend the Bill to include such a scheme because we can now amend only those parts that have been amended in another place and certainly we cannot introduce new subjects. Therefore, the amendment I propose to reduce the size of an association to 100 has, to some extent, the effect of damage limitation. It would confine the absence of a right to buy and the absence of the second-best alternative, the transferable discount, to tenants of very small associations. To make the exemption any wider would be unjust to tenants and unnecessary for associations. I hope that the House will consider, in the light of the amendment in another place, and the present circumstances, that my proposal is a reasonable compromise and will support it.

Mr. Maxton: I suppose that with this Government any small concession of principle is worth taking, even if, as is typical of the few occasions on which I have seen the Government accept the principle, they ruin it by being mean-spirited in the way they do so. The Government accept the principle that there are small housing associations that require protection. That is what the other place said. The amendment was not the result of a figure being plucked out of the head. It was tabled with a certain amount of rationality. People thought it out.
Along come the Government who say, "Yes, we accept that some small housing associations might be affected, but we do not want a figure of 250. We shall make it 100." As far as I can see, that is a figure plucked out of the air. It is not based on any great rationality. Perhaps the Under-Secretary of State will tell us exactly what is the rationale of 100 as opposed to 250.
I accept that in the past two weeks there has been a change of mind, certainly in the Department if not in the


Government. Two weeks ago, it appeared from a letter by Mrs. Gunn to the director of the Scottish Federation of Housing Associations that the Department was not going to accept the principle. The letter stated:
If you set an arbitrary limit, there is the immediately obvious distinction between associations with 249 houses"—
which is to become 99 houses—
and those with 251"—
which is to become 101. There is a whole argument put forward in the letter from the Minister's Department of less than a fortnight ago. I am pleased that the Minister has at least accepted some of the arguments. Why could the Minister not just accept the amendment of 250 put forward? It would have been so much better. The Minister says it is too big. It is not too big. Two hundred and fifty houses is a small number to control, organise and manage. However, one requires a full-time staff and a lot of effort but if one starts diminishing the number, one is in some difficulty. That is true of 250 and it may be even truer of 100.
I hope that the Minister will clarify what he said. I was not clear on the numbers that he gave. He said that there were 33 housing associations with fewer than 250 houses. Was that the total?

Mr. Millan: That was the total.

Mr. Maxton: My hon. Friend may be more percipient than I am. I was not sure whether it was the total or a number between 100 and 250. The Minister said that 22 housing associations had fewer than 100 houses. Therefore, we are talking about some 11 housing associations covering 1,700 people. The Minister may care to tell us how many people are involved in the 22. Presumably it is roughly 2,200 who will be in the smaller housing associations.
For that number of people and housing associations it is not worth the Government's while. It would have been so much better if they had just left it as it was. The other place was right. It put in the correct amendment and it would have been better if the Government had left well alone. Having said that, I do not intend to divide the House because at least the Government have conceded the principle that there are small housing associations and the basis will be there for us to improve on when we come back into office.

Amendment to the Lords amendment agreed to.

Lords amendment, as amended, agreed to.

Lords amendment: No. 10, in page 21, line 51, leave out from beginning to end of line 12 on page 22 and insert
is, by virtue of section 360(1) of the Income and Corporation Taxes Act 1970 (special exemptions for charities), exempt from tax; or

Mr. Ancram: I beg to move, That this House doth disagree with the Lords in the said amendment.

Mr. Speaker: With this we may take the Government amendment in lieu thereof.

Mr. Ancram: The Government do not feel that all charitable housing associations of whatever size, age or purpose should, just because they are charitable, be able to deny their tenants the right to buy. I and my colleagues in the Scottish Office have been urging housing associations for some years to operate practical voluntary sales policies, including the offering of discount on terms

similar to those available to public sector tenants and, as I have said on a number of occasions during the course of this legislation, our requests have been largely ignored.
I announced our intention to legislate on this subject June last year and, very soon thereafter, one of the largest associations in Scotland, which had been operating for many years very successfully as an ordinary housing association, decided that it should change its status to that of a charitable association. The change was done properly, and I have no doubts that the alteration in its objects is entirely consistent with its new programme of work. Indeed, I commend any association which works assiduously for those in special need. However, that association, and, for all I know, others, has substantial stocks of houses which under any ordinary definition would be regarded as for general needs. Their tenants are ordinary families who perhaps, at one time, found that a house rented from the housing association was the only housing option open to them. But now they no longer require the assistance the association gives and are ready and able to take over ownership themselves.
As I have said, we believe that it is right that they should have the opportunity to buy the house in which they have spent so long and that they should have available to them a discount reflecting those long years of paying rent. But their landlord associations have now acquired charitable status and unless the amendments I am are accepted both here and in another place, these tenants will not be able to buy the house in which they live. Opposition Members may say that those people should move elsewhere. I have heard that argument before. However, it seems very hard that people should have to give up the house they have occupied for so long and start again on the housing ladder simply because their landlord association has adopted a new constitutional model.
For those reasons, I do not accept that the exemption of existing charitable housing associations should extend to all such bodies. Unfortunately, the criteria by which we determine those associations which shall be exempt as against those which shall not cannot be as precise as we would wish and there are, inevitably, one or two associations caught on the wrong side of the line. In order to minimise that, we propose in the amendment in lieu that the date by which an association should have achieved charitable tax status should be amended to 14 November 1985, the date of introduction of the Bill, and we believe that a further four associations, over and above those exempt when the Bill left this House, will be exempted.
On the other arm of the exemption, the requirement to have had charitable rules since inception, we see no room for alteration. Associations set up for charitable purposes will, in almost every case, have started out with such rules. I know that there is at least one association, which I think I can name—Edinvar—which, possibly through no fault of its own, falls foul of that requirement, but I doubt that the impact of the right to buy on Edinvar will be at all serious.
9.30 pm
There remains the question of new housing associations. Earlier in our debates and in the debates in another place, the relationship between the right to buy and the Inland Revenue view of its impact on charitable tax status was much discussed. That was because the Inland Revenue had for a long time taken the view that sales by a housing association with discount, whether under a statutory


provision or otherwise, would prejudice the ability of a charitable housing association to be granted or retain its charitable exemption from tax. However, that is no longer the view of the Inland Revenue. Following representations that we made at an early stage, it has reconsidered its long-held interpretation of the law. It explained its altered view in a written answer to my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) on 10 June. My right hon. Friend the Financial Secretary to the Treasury said that, contrary to the view the Inland Revenue had previously taken, the charitable status of a housing association for the purpose of the tax exemption section 360 of the Income and Corporation Taxes Act 1970 would not be prejudiced by sales which the association would be required to make at less than market value to sitting tenants who exercise their right to buy under an Act of Parliament. That means that the right to buy and the exemption from tax may co-exist in a charitable housing association. Thus, one of the main obstacles as seen by both sides of the other place and, indeed, by hon. Members in this House at an earlier stage of the legislation has gone. That was one of the main obstacles to imposing the right to buy on new charitable housing associations.
It is my view that if that information had been available earlier to members of the other place and if there had been time for my right hon. and noble Friend the Minister of State to draw attention to it on Third Reading there, we would not today be debating the amendment. The change in view by the Inland Revenue seems to be a significant change, which provides a powerful argument for exempting only the small group of charitable housing associations which we had originally intended to exempt.
I should say something of the discussions that my Department has had in recent weeks with the Scottish Federation of Housing Associations. One newspaper headline said that we were trying to gag the SFHA. Nothing could be further from the truth. We were asking it to look at factors that we believed had been overlooked, and to say whether their effects were acceptable.
Two major points arise. First, the transferable discount scheme is expensive. Already a number of associations are exempt by reason of their charitable status and some of their tenants may wish to have access to the transferable discount, but of the associations brought into the exemption in the other place, a much greater proportion have said that they wish to buy—perhaps as much as three quarters in one. Debarred from buying, many of them will want their transferable discount. The money for that would have to come from the overall allocation to the Housing Corporation, for there is no other source. Although I drew attention to that in Committee in this House on 4 February 1986, I fear that it has been lost sight of by those who oppose the right to buy. But I thought that it was necessary and right that the SFHA should be reminded of that necessary consequence arising from the wide exemption from the right to buy for charitable associations. We have to make the scheme available on grounds of equity and to place tenants in a position comparable to their counterparts in England and Wales. At the higher level that the Lords amendment would imply, the sums involved might seriously restrict the scope for development by associations generally.
Secondly, a general exemption of this kind opens all kinds of avenues to avoid the right to buy. My Department would have had to impose controls on the registration of new charitable associations so as to ensure that their proposed activities were such as to be easily recognised as charitable. Thirdly, there would have to be close scrutiny of the activities and funding of existing charitable associations so as to ensure that they do not provide further general needs houses in situations where a non-charitable association could do the job equally well. These would have been the inevitable and undesirable consequences of the amendment passed in another place.
I am sorry to have spoken at such length, but this is a subject on which people feel deeply. I hope that I have shown that the Government have had a proper concern for both housing associations and the aspirations of their tenants. We believe that, for too long, the argument has been seen only through the sometimes over-paternalistic eyes of the housing associations. Tenants wish to be free from such attitudes and the right to buy, for those who are able to take advantage of it, is the way forward.
I ask my hon. Friends to disagree with the Lords in the said amendment.

Mr. Maxton: Perhaps you were fortunate. Mr. Speaker, not to be in the Chamber for the first of our debates on the Bill, when the Minister made great play of the way in which the period leading to the maximum discounts on flats could be accelerated. He argued that the relevant provisions had to be inserted in the Bill because that had been done when the House was considering the equivalent English Bill. He contended that this Bill could not be out of line with English legislation. The amendment that has been tabled by another place brings the Bill into line with legislation in England and Wales, yet the Minister is now saying that that cannot be done. He is not prepared to allow that charitable status in England, Wales and Scotland should be the same.
The Minister has been pleading and arguing since the Bill first came before the House that he is introducing the right to buy to Scottish housing associations—this is almost the only major argument that he has advanced—because housing association tenants in England and Wales have the right. He forgets to mention that nearly 70 per cent. of associations in England and Wales are so registered charities whereas only a small percentage of the Scottish associations are so registered.
Initially, the Minister did not intend to allow any of the Scottish associations to be recognised as charities and for their tenants not to have the right to buy. He has made a concession but he has been mean in the way in which he has done it. He should have accepted the amendment which would mean that all associations would be recognised by the Inland Revenue. That would be the only way forward because in Scotland there is not a register of charities as there is in England and Wales. The amendment suggests that all the associations should be recognised as charities and that the rules that apply in England and Wales should apply also in Scotland. That would allow housing associations to become charities in future if they could convince the Inland Revenue that they had charitable status. That would mean that their tenants would not have the right to buy as in England and Wales.
The Minister recognised from the beginning that there were anomalies. There are housing associations in England and Wales that operate in Scotland and their


tenants would not have the right to buy while others would. A housing association may go to Berwick-upon-Tweed, establish an office and set up a small housing association there, then move to Edinburgh. It might be registered as a charity in Berwick-upon-Tweed, which arguably the Minister may recognise in future, while the Minister may not recognise the one in Edinburgh as a charity in future. He is creating further anomalies by the way in which he is acting.
Let us examine what the Minister is doing. Essentially, he has taken four existing housing associations out of the charitable status which the Lords put in. What are they? There is the Grassmarket in Edinburgh. That is below 100, so he has exempted that. There is the Gowrie in Dundee. That is almost entirely special needs housing. The Minister mentioned Edinvar. That is larger. It is over 100. But, again, it is almost entirely special needs housing, so again most of it is exempt.
We come down to one housing association that the Minister is concerned about — the Link housing association. From the beginning, I have always labelled the Bill as the "Lord James Douglas-Hamilton Benefit Bill". The Link housing association is largely in the constituency of the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton). That is about saving a Member of Parliament who has a majority below 100. It may be just above 100 but it is certainly not many.

Lord James Douglas-Hamilton: Four hundred and ninety eight.

Mr. Maxton: Nearly five hundred.
Many of the tenants of the Link housing association live in pleasant houses in an attractive part of Edinburgh and they are worth a great deal of money. Because the Link housing association is now recognised by the Inland Revenue as a charity, the tenants will be denied the right to buy.
The Minister may put up an argument to exclude all housing associations that are recognised as charities. Or he can put up an argument recognising that all housing associations recognised by the Inland Revenue as charities should be exempt. In this place we should not be spending our time debating the exclusion of one housing association which is recognised as a charity, because that is all it really is, because of the constituents of one hon. Member, who happens to have a small majority. They will now have the right to buy as a result of what the Minister is doing.
I do not want to be too personal, but one of the ironies is that the amendment in the other place was moved by the uncle of the hon. Member for Edinburgh, West.

Mr. Robert Hughes: The hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) is going to find out whether it was his uncle.

Mr. Maxton: I can assure my hon. Friend that it was the uncle of the hon. Member for Edinburgh, West who moved the amendment. It may be that we should not get too involved in what is obviously a family squabble on this matter.
It really is rather strange that hon. Members are debating one housing association out of all the housing associations in Scotland. It is all down, as was the Western relief road, to the hon. Member for Edinburgh, West. I am sure that the Dunfermline college of education will be saved as well. The hon. Gentleman is a powerful Member

of Parliament. He manages to get the House to spend a lot of time debating issues which are designed to save his seat. I congratulate him on that, but it is not worthy of the Minister that he should do this in this particular way.

Mr. Ancram: The hon. Gentleman is coming to that traditional tailing off, for which his speeches are so well known, but before he sits down, can he explain why on this occasion, when he is resisting the line being taken by the Government, he fails to make all the arguments which were so powerfully made last time, that without exemption these charitable associations would lose all the advantages of being charities? Is it possibly because the income tax law has now been reinterpreted and the hon. Gentleman has to make a specious attack on my hon. Friend in order to get anywhere with his argument?

Mr. Maxton: The Minister knows my speeches better than I know them myself, but if he thought that I was tailing off he had better think again. I shall come to the point about the Inland Revenue, in a moment. The Minister makes great play about the Inland Revenue, but he should be consistent. If he is to be consistent, the only housing associations that he should exempt are those which were set up and by which many houses were bought and modernised through public subscription.
The Minister was one of the sponsors of Shelter in the 1960s. Such organisations are genuine, in the sense that they are not financed by public money. If the Minister wishes to be consistent in his argument about the In land Revenue, that is the sort of organisation that he should exempt, but that is not what he has done. Large numbers of housing associations that were recognised as charities in the past few years will still be recognised as charities, but the Minister is excluding one, the Link housing association.
Is it strange that the Inland Revenue is now giving advice different from that which it gave a few months ago? The Inland Revenue believed one thing six months ago and now says something different. That is reasonable, because it is not written into statute: it is advice from the Inland Revenue and is contrary to advice that it gave some time ago. What is to stop the Inland Revenue six months from now again giving contrary advice? If the Minister had gone to his Treasury colleagues when the Finance Bill was going through the House and said that he wanted an amendment in the Bill to deal with this, he would have been on better ground.
The Minister is basing his decision on advice that I have not seen written down. Perhaps the Minister has written advice from the Inland Revenue but advice can change and I am not prepared to trust the Inland Revenue not to change its mind in the future. The generous and right thing for the Minister to do is to agree that housing associations should continue to be recognised as charities. That is what the other place wants to do and the Minister is being mean-minded in the way that he is treating this amendment.

Mr. Henderson: The hon. Member for Glasgow, Cathcart (Mr. Maxton) has been uncharacteristically mean-minded in his speech. I would not be surprised if there were some Link housing association houses in the constituency of my hon. Friend the Minister in addition to those in the constituency of my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton). I


have housing associations in my constituency and I am also interested in this question of charity. Many hon. Members will have had representations and will have been involved in discussions during the course of the Bill.

Mr. Ancram: My hon. Friend said that there were Link houses in my constituency. I can confirm that and tell the House that there are 159 such houses in Grangemouth. I am sure that the hon. Member for Glasgow, Cathcart (Mr. Maxton) will suggest that we are trying to help the hon. Member who represents that area as well.

Mr. Henderson: I am grateful to the Minister for that additional information. This is a difficult subject and I am grateful to my hon. Friend the Minister for the way in which he has worked assiduously to get the right answer to extremely complicated questions. If I have time, I shall return to that later.
This might be an appropriate point to take up a comment which the hon. Member for Cathcart made about my hon. Friend the Member for Edinburgh, West, whom we know must remain silent during the debate. He has been present for the entire debate and it is fair to recognise that his persistence and persuasiveness have most consistently argued for the right to buy for the tenants of housing associations. That arises directly from his constituency experience.
This is also a moment to reflect that we do not seek to extend the right to buy to tenants of housing associations because we are suddenly seized of some new concept of the right to buy. We have had years of it working in the remainder of the public sector, and it has worked extremely successfully for everyone involved. Local authorities have had about £750 million worth of new resources available to meet today's needs in housing as a result of the sale of council houses. The policy has been good for tenants who have bought their houses, and it has improved the balance of housing in Scotland substantially. Indeed, balance is exactly the right word. We have reached the point where 50 per cent. of the Scottish people live in a home which belongs to the family. In other words, they are owner-occupiers. Perhaps fractionally under 50 per cent. are tenanted. That is a considerable achievement and a balanced one. Tens of thousands of tenants have benefited from the right to buy, so it is not a novel policy but an extension of a policy which has worked well in other sectors and which is now to apply to housing associations.

Mr. Maxton: Would the hon. Gentleman wish to see his hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) introduce a Bill next year extending the right to buy to tenants in the private sector, as it works so well?

Mr. Henderson: The hon. Gentleman drew a similar distinction in relation to charities. I think he was trying to

draw a distinction between one sort of genuine charity and another. He was making a distinction between charitable housing associations operating with their own money and those which operate with public money. The fact is that most housing associations operate substantially with public funds.
Earlier the right hon. Member for Glasgow, Govan (Mr. Millan) sounded surprised when I said that the Government had been infinitely more generous to housing associations than the Labour Government when the right hon. Gentleman was Secretary of State for Scotland. He will find the figures given to me by my hon. Friend the Minister in a written reply. I asked the Secretary of State for Scotland how much public money had been paid to housing associations in Scotland since May 1979, and how it compared with the preceding five years. My hon. Friend answered:
Total payments from public funds amounted to £524·3 million in the six years from 1 April 1979 to 31 March 1985; this compares with £41·91 million for the five years from 1 April 1974 to 31 March 1979." — [Official Report, 11 December 1985; Vol. 88, c. 688.]
That supports my remark that there has been a tenfold increase in housing association funds under this Government.
I wish to give full credit to the part that housing associations have played in meeting the needs of Scotland's housing, especially in the case of special needs housing. They have been far ahead of local authorities in providing houses for people with special needs. Special needs were referred to specifically in the Green Paper published by the right hon. Member for Govan in 1976 as pressing needs, yet there were more met by housing associations, as he will agree, than by many local authorities.
Finally, my hon. Friend the Minister has been patient in meeting the representations from both sides of the House. In my case I have even given him contradictory representations from constituents and, curiously enough, he has been able to meet both because of the change in the Inland Revenue's advice. I am extremely grateful to him for the way in which he has met the needs of housing in Scotland and the interests of hon. Members.

Question put and agreed to.

Lords amendment No. 10 disagreed to.

Amendment made to the Bill in lieu thereof: in page 22, line 1, leave out '3 October 1980' and insert '14 November 1985'.—[Mr. Ancram.]

Subsequent Lords amendments agreed to.

Committee appointed to draw up a reason to be assigned to the Lords for disagreeing to their amendment No. 8 to the Bill: Mr. Ancram, Mr. Dewar, Mr. Durant, Mr. John MacKay and Mr. Maxton; Three to be the quorum.—[Mr. Ancram.]

To withdraw immediately.

Reason for disagreeing to Lords amendment No. 8 reported, and agreed to; to be communicated to the Lords.

AIRPORTS BILL (MONEY] (NO. 2)

Queen's Recommendation having been signified—

Resolved,
That, for the purposes of any Act resulting from the Airports Bill, it is expedient to authorise the payment out of money provided by Parliament of any sums required by the Secretary of State for making grants to airport operators in connection with directions given under the provisions of that Act relating to the provision of special accommodation at airports.—[Mr. Neubert.]

Airports Bill

Lords amendments considered.

New Clause

STATEMENTS IN CONNECTION WITH FLOTATION

Lords amendment: No.1, after clause 9 insert the following new clause:
.—(1) This section shall apply where

(a) an offer for sale to the public of any securities of the successor company is made by or on behalf of the Crown;
(b) any invitation or advertisement is issued (whether or not in documentary form) by or on behalf of the Crown in connection with the offer; and
(c) that invitation or advertisement does not contain all the listing particulars.

None of the persons mentioned in subsection (3) shall incur any civil liability by reason of the invitation or advertisement, or any omission from it, if—

(a) the contents of the invitation or advertisement were submitted to the Council of The Stock Exchange;
(b) the Council did not object to the contents of the invitation or advertisement; and
(c) the invitation or advertisement and the listing particulars, taken together, would not be likely to mislead persons of the kind likely to consider the offer.

(3) The persons referred to in subsection (2) are—

(a) the Crown;
(b) any person acting on behalf of the Crown in connection with the offer;
(c) the maker of any statement contained in the invitation or advertisement;
(d) any person responsible for the preparation of, or of any part of, the listing particulars.

(4) The reference in subsection (2) to a person mentioned in subsection (3) incurring civil liability shall include a reference to any other person being entitled as against the person so mentioned to be granted any civil remedy or to rescind or repudiate any agreement.
(5) In this section "the listing particulars", in relation to the offer, means such particulars as, by virtue of any provision of any enactment other than this section or of any subordinate legislation, have been approved by the Council of The Stock Exchange for the purposes of the admission of the securities to which the offer relates to the Official List of The Stock Exchange.

The Parliamentary Under-Secretary of State for Transport (Mr. Michael Spicer): I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Speaker: With this it will be convenient to consider Lords amendments Nos. 78 and 83.

Mr. Spicer: The new clause contained in Lords amendment No. 1 relates to the use of a mini-prospectus in relation to the flotation of the BAA's successor company. Although it is not certain that we will wish to issue such a document, we may decide that it would be valuable as part of our compaign to widen the ownership of shares. The new clause provides exemption from civil liability resulting from a mini-prospectus where the document, when read together with the full prospectus, would not be misleading for potential investors.
This is a very limited exemption that ensures that liability does not arise simply as a result of abridging the prospectus. A similar provision has been included in the Gas Bill, and hon. Members will note that the Financial Services Bill will confer a similar exemption in respect of flotations in general. The principle is a sound one, and I hope that the House will approve it.

Mr. Robert Hughes: The Minister said that this deals with a mini-prospectus, and I have no doubt that that is so. But it is clear from the way in which the amendment is drafted that it is an all-purpose escape clause that absolves from civil liability anyone connected with the issuing of this prospectus if someone challenges the facts during flotation.
We know that we cannot hold the new Secretary of State responsible for that, although I am sorry that he has taken on the bad habits of his predecessor with these catch-all clauses that are widely drawn and include belts and braces, buttons and every other kind of safety device that one could think of.
The Minister said that the amendment is necessary, although I am not quite sure why. He has not explained the need for this all-embracing escape clause. Why was it not on the face of the Bill when it was first published? Has he simply decided that the Government might use a mini-prospectus, or does the reason go wider than that? The Minister confirned that there is a provision similar to this in the Gas Bill, and it would appear that it will be a feature of all privatisation bills.
I am especially worried about the blanket immunity for omission from the invitations or advertisements. I am primarily worried about staff conditions and the possible position with regard to the undertakings given over pensions for existing staff. As I understand it, the position is—as the chairman of the British Airports Authority has stated clearly and specifically in writing—that the pensions of those people already in employment will not be changed.

It being Ten o'clock, the debate stood adjourned.

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, consideration of Lords Amendments to the Airports Bill, and the Drug Trafficking Offences Bill may be proceeded with, though opposed, until any hour.—[Mr. Neubert.]

Airports Bill

Question again proposed, That this House doth agree with the Lords in the said amendment.

Mr. Robert Hughes: The chairman said quite clearly that pension rights will be protected for those already in employment, although that may not and probably will not be so for new employees.
I am rather concerned that if the information issued at the time of flotation does not contain such an undertaking, there is a possibility that the new owner or owners might claim that the provision was not in the flotation documents and therefore does not apply. The Noble Lord the Earl of Caithness has written to my noble Friend the Lord Underhill on this issue, and he has repeated and confirmed the specific assurances about pension rights.
Unfortunately, the original correspondence from the Department to Sir Norman Payne is not to be generally made available. I should like a twofold assurance on this matter. First, I should like an undertaking that pension rights will continue and that that will be put in the record. Secondly, and more importantly, I should like the Minister to make it clear that in any flotation documents, the undertakings on pensions or any other undertakings given to the employees and staff in relation to conditions of employment, are clear, so that the new owners, whoever

they may be, will be well aware of the assurances and that, when buying shares in the flotation, they are aware of their responsibilities which have been sent to them by the Department of Transport.

Mr. Stephen Ross: When the Minister replies, will he confirm that he intends that the articles dealing with flotation should include the golden share condition? That is not written in the Bill, but the Government said in another place and in Committee here that they intended to make that point clear. May we have an undertaking tonight that it will appear in the statements related to the flotation of shares?

Mr. Michael Spicer: I can give the assurances requested by the hon. Member for Aberdeen, North (Mr. Hughes) in respect of pension rights. They will appear in the documentation which we shall produce on flotation and there will be an assurance that existing pension rights to which the hon. Gentleman referred will be safeguarded. I hope that that gives the hon. Gentleman the assurance that he was seeking.
I can similarly assure the hon. Member for Isle of Wight (Mr. Ross), that a special share will be retained by the Government for the purpose of limiting the shares held by any one person or institution to a maximum of 15 per cent. of the shareholding.

Question put and agreed to.

Subsequent Lords amendments agreed to.

New Clause

CAPITAL CONTROLS RELATING TO INVESTMENT IN PUBLIC AIRPORT COMPANIES BY LOCAL AUTHORITIES IN ENGLAND AND WALES

Lords amendment: No. 2, after clause 19 insert the following new clause:
—(1) Where a local authority dispose of any securities of a public airport company (whether it continues to be such a company after the disposal or not)—

(a) any amount received by the authority in respect of the disposal shall be treated for the purposes of section 72 of the 1980 Act (expenditure which authorities may make) as a receipt of the authority which, by virtue of section 75(1) of that Act, is a capital receipt of the authority for the purposes of Part VIII of that Act (capital expenditure of local authorities etc.), but
(b) only the relevant sum shall be taken into account under section 72(3)(d) of that Act.

(2) In subsection (1) "the relevant sum", in relation to an amount falling within paragraphs (a) of that subsection, means—

(a) three-tenths of that amount, or
(b) if regulations are made for the purposes of section 72(3)(d) of the 1980 Act which prescribe a proportion other than three-tenths in relation to disposals falling within subsection (1), the proportion of that amount so prescribed.

(3) Where a local authority incur any expenditure in respect of the acquisition of any securities—

(a) of a public airport company, or
(b) of any company which, as a result of the acquisition by the authority of those securities, becomes a public airport company,

the amount of that expenditure shall, in so far as it is not prescribed expenditure of the authority for the purposes of Part VIII of the 1980 Act by virtue of Schedule 12 to this Act, be treated as prescribed expenditure of the authority for those purposes.
(4) In this section and section 20 "the 1980 Act" means the Local Government, Planning and Land Act 1980; and this section and section 20 apply to England and Wales only.

Mr. Michael Spicer: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker (Mr. Harold Walker): With this it will be convenient to take Lords amendments Nos. 3 to 7 and No. 60.

Mr. Spicer: I believe that the new clause introduced by Lords amendment No. 2 will commend itself to the House. It creates a new incentive for local authorities to introduce private capital into their airports by enabling them to use the proceeds from the sale of shares to justify extra capital expenditure. This is achieved by classing the proceeds as capital receipts which the authorities may add to their capital expenditure allocation. The only constraint is that the use of these receipts to justify extra spending will be limited by the prescribed proportion of three tenths which already applies to other non-housing receipts. The additional spending power may be used for any services.
I believe that the House will also welcome Lords amendments Nos. 3 to 7, which create a further incentive to introduce private capital. Clause 20 applies to private capital raised by public airport companies the same controls as apply to capital finance provided by the controlling authority because both add to the public sector borrowing requirement. The amendments deal with the situation in which the airport company issues securities which transfer control of the company to the private sector. Because the private sector would then bear the risk of the investment, the amounts raised from those shares would not add to the public sector borrowing requirement. The amendments therefore provide that amounts raised by public airport company share issues which transfer control to the private sector will not count against the former controlling authorities' capital expenditure allocation.
Lords amendment No. 60 is purely technical.
I commend the Lords amendments to the House.

Mr. Robert Hughes: It looks as though there has been some shift by the Government in relation to the use to which money raised by the privatisation of local authority airports can be put for spending on other purposes. Nevertheless, I am somewhat concerned about the three tenths qualification in subsection (2)(a) of the new clause. How far does that limit apply? Is it three tenths in any one year? Does it mean that the authority can eventually spend all the money for other purposes? If so, that is certainly some move.
In my view, it is quite wrong that there should be any constraint whatever on the use of the money raised. As the Minister knows, I totally oppose the selling-off of local authority airports and I am not at all pleased at the way in which the Bill compels authorities to do this against their wishes. The Bill does not actually say that they must sell the airports but the financial conditions laid down about the way in which local authorities can develop their airports in terms of capital spending mean that they will be forced to sell them off. In those circumstances, it is grossly unfair to refuse authorities the freedom to use the money as they think best. Incidentally, it is also entirely against the Tory philosophy about which we have heard so much of freedom for local authorities from intervention by the dead hand of Whitehall, although the Government have been intervening far more vigorously in local authority affairs than any Government for many years.
If there is indeed a relaxation of the public sector borrowing requirement rules by the Treasury I hope that

that is the influence of the new Secretary of State for Transport, perhaps initiated in his former position at the Treasury. Many of us have been utterly bemused at the illogicality of Treasury rules. This move is at least some recognition of reality.
I have one small question about subsection (3)(b) of the new clause, which says:
that expenditure shall, in so far as it is not prescribed expenditure of the authority for the purposes of Part VIII of the 1980 Act by virtue of Schedule 12 to this Act, he treated as prescribed expenditure of the authority for those purposes.
I am not sure that I understand all that gobbledegook. When a local authority decides that it has to form a private company and there are costs involved, will any extra cash be available to assist it? From the way the clause is drafted, I presume that it will be prescribed expenditure. I hope that no difficulty has arisen about that.

Mr. Stephen Ross: I wish to deal with a point that was raised by the hon. Member for Aberdeen, North (Mr. Hughes). It seems odd that the provision about three tenths is written into the Bill. Can it be changed by order, or will there have to be and amendment to the Bill? Surely that is considered annually. We hope that the Government may relax the provision in relation to housing receipts. They have relaxed the provision slightly already for county councils. I wonder why the provision has been written into the Bill at this stage.

Mr. Michael Spicer: The hon. Members for Aberdeen, North (Mr. Hughes) and Isle of Wight (Mr. Ross) asked about the three tenths and wondered whether the additional elements will be applicable over the years ahead. The answer is, yes. I hope that answers that point.
I do not want to paraphrase too liberally the remarks of the hon. Member for Aberdeen, North, but he said that there was implicit in this part of the Bill an element of compulsion. That is not so. Indeed, he will know that since we met in Committee we have said that in determining the debt equity ratio and in taking out any debt element and leaving it with the local authority, the interest on that debt can be taken into consideration for rate support grant. Concern was expressed about that in Committee. Some hon. Members felt that there was an implicit element of compulsion in respect of some airports, so we have dealt with that issue.
Despite pressures from various quarters, there is no compulsion, although I do not think that either hon. Gentleman would accuse me of disguising the fact that we are enthusiastic about the involvement of private capital in the development of regional airports.

Question put and agreed to.

Subsequent Lords amendments agreed to.

Clause 22

PROVISION OF SERVICE FOR PUBLIC AIRPORT COMPANIES

Lords amendment: No. 8, in page 18, line 21, at end insert—
(3) Where a principal council have entered into an agreement under this section, the accounts of that council shall include a separate account in respect of that agreement and

(a) in England and Wales, section 24 of the Local Government Finance Act 1982 (rights of inspection) shall apply in relation to any such separate account


as it applies in relation to any statement of accounts prepared by the council pursuant to regulations under section 23 of that Act; and
(b) in Scotland, sections 101 and 105 of the Local Government (Scotland) Act 1973 (rights of inspection and regulations as to accounts) shall have effect as if any reference to an abstract of the accounts of an authority included a reference to any such separate account."

Mr. Michael Spicer: I beg to move, That this House doth agree with the Lords in the said amendment.
Clause 22 makes provision for a principal council to provide a very limited range of services to an associated public airport company at proper commercial charges. In Committee several hon. Members, in particular my hon. Friends the Members for Tayside, North (Mr. Walker) and for Saffron Walden (Mr. Haselhurst), asked me to see what more could be done to stimulate competition in the provision of such services by local authorities. The amendment before us requires that where any agreement has been entered into under the provisions of clause 22, the accounts of the principal council concerned shall include a separate account in respect of that agreement. It also provides for public rights of inspection of such accounts.
It will be open then for other potential suppliers of those services to tender, if they so wish, as suppliers to the airport company when the particular contract next comes up for renewal. The amendment meets some of the concerns expressed, in particular, by some of my hon. Friends when we discussed the issue in Committee.
I hope that the amendment commends itself to the House.

Question put and agreed to.

New Clause

AVOIDANCE OF RESTRICTIONS ON TRANSFER OF SECURITIES OF PUBLIC AIRPORT COMPANY

Lords amendment: No. 9, after clause 23 insert the following new clause —
.—(1) Any provision to which this section applies shall be void in so far as it operates—

(a) to preclude the holder of any securities of a public airport company from disposing of those securities, or
(b) to require the holder of any such securities to dispose, or offer to dispose, of those securities to particular persons or to particular classes of persons, or
(c) to preclude the holder of any such securities from disposing of those securities except—

(i) at a particular time or at particular times, or
(ii) on the fulfilment of particular conditions or in other particular circumstances.

(2) This section applies to any provision relating to any securities of a public airport company and contained in—

(a) the memorandum or articles of association of the company or any other instrument purporting to regulate to any extent the respective rights and liabilities of the members of the company,
(b) any resolution of the company, or
(c) any instrument issued by the company and embodying terms and conditions on which any such securities are to be held by persons for the time being holding them."

Mr. Michael Spicer: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, it will be convenient to discuss Lords amendment No. 10.

Mr. Spicer: The Bill provides that any restriction on the disposal of securities in a public airport company, however or wherever that restriction is expressed, should be void. That is how the Bill now stands. This provision is to ensure that the Government's policy of encouraging the sale of airport company shares to the private sector is not in any way frustrated by the imposition by councils of conditions making the disposal of shares difficult or impossible.
However, some restrictions or conditions on sales of shares might, we recognise, be necessary. In particular—this point was raised by the hon. Member for Isle of Wight (Mr. Ross) — we have agreed that there will be a restriction on the maximum holding of British Airports Authority shares by any one person or body. We believe that it would be wrong to deny local authorities the chance of incorporating a corresponding restriction in the articles of association of the new public airport companies.
It is also important not to invalidate restrictions or conditions arising in a normal contract for the sale of securities. I think, for example, of an agreement binding the seller to transfer securities to the buyer at a certain date in return for a consideration. The amendment has, therefore, been designed specifically to define the restrictions that are to be prohibited, and the instruments or circumstances in which restrictions are to be invalid.
Clause 24, which the new clause replaces, will be withdrawn. However the Opposition may feel about the general thrust of this part of the Bill, I think that the amendment, which gives greater precision and which allows the flexibility that I have outlined, will commend itself to them.

Mr. Robert Hughes: The Minister has been very reasonable, just as he always has been in our debates on this part of the policy which deals with local authority airports. But, as I understand clause 23, it is trying to stop what has happened in Manchester dead in its tracks. I am sorry that the Minister did not understand from the Committee and Report stages, just how strongly people feel about this issue. Manchester has met all the conditions that the Government sought to impose about the running of local authority airports.
The Minister says that he has never hidden his enthusiasm for introducing private capital into local authority airports. However, it goes slightly further than that. He has never hidden his enthusiasm for selling off the airports so that they are no longer in local authority hands. He has also found it necessary to dress that up slightly, so that it is not presented as sheer naked political dogma. He said that it was necessary to introduce the disciplines of a plc into the running of local authority airports. During our discussions, he did not give us any examples of local authorities being profligate with the public purse when it comes to running airports. But that is neither here nor there.
The fact remains that the sole purpose of clause 23 would appear to be to bring Manchester back into line. Manchester produced a private company that would have done everything that the Minister wanted, yet he still would not permit it. Also that strikes clearly at the freedom of local authorities to decide how they shall run their airport business. I am sorry that the Minister has not found it possible to meet our wishes that Manchester in


particular, having gone so far, should be left alone. However, we must accept that the Minister has the majority and that he will drive the measure through, whatever anyone thinks.

Mr. Richard Page: I support the amendment because it introduces an equality of treatment with the British Airports Authority. I take this opportunity to echo the words of the hon. Member for Isle of Wight (Mr. Ross) in thanking my hon. Friend the Parliamentary Under-Secretary for accepting the spirit behind new clause 11. Back on 9 April, at Report stage, some hon. Members introduced protections for the British Airports Authority. Obviously, they sought to protect it through a golden share to ensure that it is not taken over by a series of foreign airlines. I should like my appreciation recorded in that respect. I believe it is only right that local authorities running airports should be placed on an equal basis. Hopefully, they will go down that route in the fullness of time.

Mr. Michael Spicer: I thank my right hon. Friend the Member for Hertfordshire, South-West (Mr. Page) for his remarks. The advice and encouragement that he and others have given have been well heeded. The hon. Member for Aberdeen, North (Mr. Hughes) is absolutely right; there has never been any intention to disguise the fact that we should like either an element of private capital or the sale of the companies to the private sector. If that occurred, they would cease to be within the public sector borrowing requirement. There is nothing between the hon. Gentleman and myself on that issue. I feel strongly that there are enormous benefits for companies. I also believe, having got to know some airports quite well, that a number will eventually decide to go that way for various reasons.
Manchester has not met the condition that allows local authorities to sell shares freely. That matter will cause some concern. We shall consider the Manchester scheme with as little dogma as the hon. Gentleman has encouraged us to do. Our objective, as always, is to ensure that Manchester airport has every kind of assistance placed before it so it can quickly become a great international airport. I am quite certain that, as a result of the encouragement of the Government and the traffic rights which the Government have earned for it, that will be the case.

Question put and agreed to.

Subsequent Lords amendment agreed to.

Clause 28

DIRECTIONS TO AIRPORT OPERATORS IN THE INTERESTS OF NATIONAL SECURITY ETC.

Lords amendment: No. 11, in page 22, line 11, leave out from "security" to end of line 13 and insert—
(2A) The Secretary of State may give to the appropriate person in relation to any airport a direction requiring that person (according to the circumstances of the case)—

(a) to do, or not to do, in connection with any operational activities relating to the airport a particular thing specified in the direction, or
(b) to secure that a particular thing specified in the direction is done or not done in connection with any such activities,

if the Secretary of State considers it necessary or expedient to give such a direction in order to discharge or facilitate the discharge of any international obligation of the United Kingdom.

(2B) In subsection (2A)—
the appropriate person", in relation to an airport, means—

(a) the airport operator; or
(b) an associated company of the airport operator; and

operational activities", in relation to an airport, means any activities—

(a) which are carried out on wholly or mainly for the benefit of users of the airport, or
(b) the revenues from which are wholly or mainly attributable to payments by such users;

but the Secretary of State may by order make such modifications of the definition of "operational activities" as he thinks necessary or expedient having regard To any international obligation of the United Kingdom.

Mr. Michael Spicer: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to take Lords amendments Nos. 12 to 14, 18, 19, 22, 23, 27 to 38, 48, 72, 82, 84, 86, 87 and 92.

Mr. Spicer: There is a long list of amendments. I shall not go through them all in detail. However, there are one or two points which I think that the House would want me to make. I shall do so as briefly as I can. This apparently complex set of amendments deals with two related circumstances where an airport operator might not carry out airport-related activities himself—for instance, if an associated company carried on commercial activities, or if an intermediary company granted concessions for airport-related activities.
Amendments 11 to 14 deal with the first strand of the associated company problem — how to secure the discharge of the United Kingdom's international obligations in circumstances where an operator does not control the whole of an airport's business. If, for good commercial reasons, a decision were taken in future that the airport operator should manage only the aeronautical side of the business while a separate associated company managed the commercial side, a power of direction over just the airport operator could be insufficient to secure the discharge of the United Kingdom's international obligations. It would clearly be wrong for an airport group to receive all the benefits of those commercial activities without also being bound by the obligations that go with the business of running an international office. It would be equally wrong for the power of direction to be deficient. Amendment No. 11, therefore, extends the power of direction to an airport operator's associated company.
Amendment No. 11 also defines power with respect to "operational activities". They are defined to encompass the whole of the airport-related business, since there is no justification for allowing the power of direction to extend to activities which may be totally unconnected with the business of running an airport. Because our international obligations might change in the future, the definition is amenable by order, subject to negative resolution of both Houses of Parliament. This means that the power of direction will be extendable as far as our international obligations require, whatever may happen in the future.
The second strand of associated company problems relates to economic regulation. Since regulation is targeted on the airport operator, the same problem could arise in that an associated company could not be regulated under the terms of the Bill. It is clearly not right that an airport group could enjoy the financial benefits of commercial activities from a monopoly position without also being


subject to the regulatory safeguards provided for in part IV. Amendment No. 92 closes that loophole by allowing the CAA to impose conditions direct on an associated company.
Amendments Nos. 18, 22, 23 and 32 to 35 introduce the more clear and precise phrase "operational activities" to all the clauses in part IV which refer to the whole airport-related business. Amendments Nos. 72, 84 and 86 allow clauses 28 and 38 to be extended to the Channel Islands and overseas territories by Order in Council.
Amendments Nos. 19, 27 to 31 and 36 are designed to deal with circumstances where the airport operator does not himself grant franchises or concessions to others to carry out operational activities but interposes an intermediary — for instance, a company specialising in franchising to do so on his behalf. In such a case, it would not be possible, under the Bill as it stands, to impose conditions on an airport operator to remedy the adverse effects of any monopoly abuse at the end of a chain of franchises. These amendments close that loophole.
I draw the attention of the House in particular to amendments Nos. 37 and 38 which fulfil a commitment made by the Government on Report in this House to meet the concerns of several hon. Members—in particular, my hon. Friend the Member for Hayes and Harlington (Mr. Dicks) — about the protection against monopoly abuse offered by the Bill to concessionaires at airports. The amendments provide that, where the Monopolies and Mergers Commission is investigating a matter which relates to the granting of concessions, then, in addition to the objectives in clause 31—which include furthering the reasonable interests of airport users — it should have regard also to the furtherance of the reasonable interests of concessionnaires. We believe that this provides the right degree of guidance to the MMC at the point it needs it without keeping the balance on its objectivity in one direction. We made that commitment and we have now honoured it.
I commend all these rather technical amendments to the House.

Mr. Robert Hughes: As the Under-Secretary of State said in his peroration, a series of technical amendments are included in this group. I must admit that I was slightly confused when we jumped from national security and relations with a territory outside the United Kingdom to franchise holders at airports, all under one group of amendments. That is not, of course, any criticism of the choice of amendments.
I was slightly worried by the introduction of the Under-Secretary of State when he said that there might be two separate companies—one operating the commercial side of the business and the other operating the aeronautical side. We have always been worried, with the proposed privatisation of the British Airports Authority, that something like this would happen. It is clear that the most lucrative part of the BAA's business is not the aeronautical side but the franchises and commercial activities. It has always been our concern that the commercial activities might be milked off in some sort of asset-stripping arrangements but that is a fairly general point.
I want specifically to raise the issue of security with the Minister because I certainly do not object to anything the Secretary of State might do to try to protect national

security in time of war. I do not think that there is any quarrel on either side of the House about that. However, I think that the clause is a rather cumbersome way of going about it. I would have thought that in time of war in the interest of national security there was probably adequate existing legislation without this great long cumbersome clause now amended in the Bill.
10.30 pm
I wonder what representations the Minister has had recently from, for example, the airports or the airlines, about the cost of security at our airports, which is growing as each week and month goes by. I do not think that we object to the fact that security is increasing in cost. Clearly modern technological changes will require better security equipment and certainly, so long as there is a security threat, we must have the necessary equipment and training. We do know that the new equipment will be extremely expensive. I hope that the Minister will look at that and discuss fully with the British Airports Authority and the relevant airlines how security might be improved and paid for. I am not asking him this evening for a commitment about who pays for security or anything like that. However, I hope that he will give an undertaking that he will discuss, or perhaps continue discussions, on what is a growing problem in terms of security and cost.
I wonder whether the Minister saw "Panorama" on Monday night. I did not see it myself but I know that it was a very worrying programme. I know that in a written answer the Minister has said that he is stepping up training and I am glad to hear that. However, basically I am concerned at the fact that the programme put a security man through a series of tests and he managed to pick out from a number of items of baggage all the things that had been planted for him to find except three. It so happened that the three he missed were suitcases containing plastic explosive. Clearly, it must be a matter of serious concern to see that we have the equipment to find that out.
My concern, in addition to security, is that if any part of that programme is shown in the United States it will do nothing to help the tourist trade and airline traffic, which as we know, is severely down from the United States. If people feel that there might be deficiencies in our security arrangements it will certainly not help to persuade people that there is no danger in coming to this country. I wonder whether the Minister might say something about that.

Mr. Anthony Steen: It is right that security is tremendously important and we must ensure that our security is the best we can manage. However, would the hon. Member agree that the new arrangements that the British Airports Authority has introduced in terminal I are discouraging tourists from travelling on domestic services because of the delays that are taking place? They are causing such disruption to the airlines that planes are going without the passengers? Would he agree that the British Airports Authority must find a better way of speeding passengers through? There are four machines in terminal 1, but only one or two are ever working? Surely something should be done there.

Mr. Hughes: I was not going to mention that, but I am glad that the hon. Gentleman has raised it. I have made my own representations to the British Airports Authority because the new arrangements are appalling for the passengers. There is now a nice little notice up saying that the authority is sorry it is taking a long time but it is


recruiting more staff, please bear with it. I object to the change in the security arrangements. Previously, if one was flying the shuttle the security was done at the shuttle. If one was on British Midland, there were separate security arrangements. If one was on an internal domestic flight, there was a hank of two machines that one used to go through. That seemed to work quite well.
I have no doubt that the British Airports Authority has its reasons for having shifted the security system up front so that everybody goes through the same system. But on several occasions when I have been to Heathrow, I have found only two machines working at peak hours. One Friday evening, the queue was not just two deep, but eight or 10 deep, from the security point right back through the whole of terminal 1 to where people go for the European services. It was absolutely appalling. There was no warning.
Luckily, I did not have any baggage with me that evening. Perhaps I should not admit it, but I queue-jumped. I walked right past the queue, and through the individual machine. Heathrow has had its problems. They have not yet been satisfactorily resolved, but I hope that they soon will be. I do not blame the people there for trying to make the best security arrangements. Part of the problem is that they have started to do much more individual bag-searching. That is right.

Mr. Bill Walker: Does not the hon. Gentleman feel, as a regular traveller like myself, because we have to go up and down every week, that the people at Heathrow have put the machines in the wrong place? Passengers do not know which aircraft is taking off from which gate at what time. That information is shown on the board before one reaches the security system, and the passengers have to wait to reach it before they go through security. That causes part of the bottleneck. That has been my experience—

Mr. Deputy Speaker: Order. It is not in order to have a long discussion about the arrangements at Heathrow on this group of amendments. I hope that we shall direct our attention more narrowly to them.

Mr. Hughes: I do not want to go further down the road of discussing where the information is, and so on. That is going into far too much detail than the amendments warrant.
Under the amendment, the Secretary of State takes the power to direct the airport authorities to make various arrangements for national security. I agree that national security covers the security of all passengers who fly out. It is right that there should be some discussion of it.
I hope that the Minister will have something to say which is not of a palliative nature, to the effect that everything is all right. One of the things that may have provoked some of the queries about airport security is that the hon. Gentleman has sometimes put on too bland a profile about how good security was. We have to get the balance right. I hope that if the Minister saw "Panorama", he will say whether there is anything in that programme that might be of assistance to him, and whether he will do something about it under the clause.

Mr. Robert McCrindle: I am at least as confused as the hon. Member for Aberdeen, North (Mr. Hughes) as to the impact of this group of

amendments. I am not even sure that this is the correct place in which to make the single point upon which I would welcome a reply from my hon. Friend the Minister.
My hon. Friend will recall that in Committee and on Report, amendments were moved to try to make it a requirement on the part of the privatised British Airports Authority to discuss with the airlines, as the principal users of the airports, the basis upon which the facilities that the BAA will continue to have to provide will be provided. In another place, Lord Kinnoull moved an amendment to require such consultation to be provided. In response to Lord Caithness's suggestion that the amendment be withdrawn to allow discussions to take place to see whether a reasonable compromise could be achieved outside the Bill, I understand that the amendment was withdrawn.
Have such discussions taken place? If so, is it likely that the Bill will require those consultations to proceed, as all the British airlines would prefer? Or as we reach the end of the parliamentary passage of the Bill, are we forced to hope that the British Airports Authority will, out of the goodness of its heart, decide that it is in its interests to have such discussions before providing, or failing to provide, facilities which the airlines consider to be essential?
Like the hon. Member for Aberdeen, North, I was unable to see the "Panorama" programme, but I have no doubt from reading press reports that it raised serious matters to which we are duty bound to pay attention. However, does my hon. Friend agree that, although it might have made splendid television, it might have been in the interests of many passengers, who might become nervous in the extreme at the prospect of travelling as we enter the peak of the summer season, if "Panorama" and the BBC had made further inquiries as to whether other activities were taking place to which they could not be made privy? That might have presented a more balanced programme. I am not in favour of censorship on such matters, but I get the impression from what I hear of the programme that much concern has been caused. Does my hon. Friend agree that, in all the circumstances, the BBC might have done a better service to the travelling public and to the tourism and aviation industries if it had presented the position in a more balanced way?

Mr. Stephen Ross: As a member of the Select Committee on Transport, I welcome amendment No. 11. The Minister is worried about: security at airports, and he will know that a report from the Select Committee on security at airports, especially at Heathrow is either on his desk or about to reach him. I assure the House that we have considered the matter in great detail and that our report will be worth while. For the moment, we are reporting only to the Minister. The report will be published later.
I welcome the line that the Minister has taken on the amendment. I hope that the Select Committee's recommendations will find a niche in his views about the current position, which is not as satisfactory as it should be. There is no point in hiding the fact from the general public. I did not see the "Panorama" programme, but I have no doubt that it was overdone. I feel sorry for the BAA and the airlines, which must try to resolve problems that are almost unbearable. They cannot be dealt with to everyone's satisfaction. I have just returned from Istanbul, and I can report that the security at Istanbul airport is magnificent.

Mr. Steen: I agree with the hon. Gentleman that the British Airports Authority does everything that it can to ensure safety at its airports. Does he agree that there is no limit to the amount of money that could be spent? But it is not the BAA's money, it is the airlines' money. Does he agree that if there must be increased security, its cost should not fall only on the airlines that fly from that terminal and that the Government should take some responsibility for that expenditure?

Mr. Deputy Speaker: Order. This has nothing to do with the amendments that are before the House.

Mr. Ross: If the hon. Gentleman is patient, he might discover that that is one recommendation of the Select Committee.

Mr. Michael Spicer: Before I deal with the points made by the hon. Member for Aberdeen, North (Mr. Hughes) may I tell my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) that two points were implied in what he said. First, on the specific point of consultation, we shall issue an order when the relevant part of the Act comes into effect. If the thrust of my hon. Friend's questions was directed to mechanisms, capacity and consultation, these are matters that we shall discuss when we come to Lords amendments Nos. 58 and 88. I appreciate the difficulty of wading through this group of amendments while considering what it is all about.
10.45 pm
I say to the hon. Member for Isle of Wight (Mr. Ross) that I respect the work that the Select Committee on Transport is doing on this subject. Its very existence and the thoroughness with which it has gone about its work have had beneficial effects. The Select Committee is acting in the best interests of all concerned. Much of its work has been unsung and has been done in privacy. That is in contrast to the way in which the Panorama programme approached the matter. To take up the remarks of the hon. Member for Aberdeen, North, I suspect that that programme has made life more difficult for the British tourist industry and I am grateful to the hon. Gentleman for giving me the opportunity to respond to his comments. I remind the House that the powers of my right hon. Friend the Secretary of State over security in this context come under 1982 legislation and will not come under the parts of the Bill that deal with national security and security in exceptional circumstances.
It is right that a balance has to be struck. As my hon. Friend the Member for South Hams (Mr. Steen) said, the security record of our airports is fantastic. It appears that Americans have been put off from coming to Britain from time to time, and over the past five years there have been 32 hijacks of aircraft originating from United States airports and four bomb attacks. In Britain, the comparable figure is zero.

Mr. Steen: I think that the House will want to pay tribute to the remarkable dedication of the staff at Heathrow and other airports in Britain who concern themselves with safety. As my hon. Friend the Minister has said, they have done a remarkable job. Does my hon. Friend agree that we should involve the airlines as well as the British Airports Authority in trying to find solutions to problems? When privatised, the authority should bring in the consumer in finding solutions. We should pay tribute to the sterling work that has been done.

Mr. Spicer: rose—

Mr. Deputy Speaker: Order. The Minister is leading the debate into a wide general discussion of airport security, which is out of order and unhelpful. I hope that he will set an example and address himself specifically to the amendments that are before the House.

Mr. Spicer: I hope that you will allow me to respond briefly to the debate which has taken place, Mr. Deputy Speaker. I tell my hon. Friend that responsibility lies with my right hon. Friend the Secretary of State. A committee that is comprised of the airlines advises on security.
British airports have a superb security record, but it is right that we should not be complacent. The hon. Member for Aberdeen, North is right to press us on these matters and I think that I have responded satisfactorily to his remarks. The Government have taken a number of actions and if I were to refer to them in detail, Mr. Deputy Speaker, you would rightly call me to order. We are with the hon. Member for Aberdeen, North in recognising the need for training and the provision of the best equipment and the necessary resources.

Question put and agreed to.

Subsequent Lords amendments agreed to.

Clause 29

PUBLIC AIRPORT COMPANIES AND THEIR CONTROLLING AUTHORITIES

Lords amendment: No. 15, in page 23, line 41, leave out subsection (5) and insert—
(5) Where—

(a) the subject-matter of any particular rules made by the Secretary of State under this section is a matter in relation to which the CAA has given advice to the Secretary of State (whether before or after the passing of this Act), and
(b) those rules are so made not later than five years after the giving of that advice,

the requirements of subsection (4) shall be taken to have been satisfied with respect to those rules.

Mr. Spicer: I beg to move, That this House doth agree with the Lords in the said amendment.
The amendment avoids the Secretary of State having unnecessarily to request fresh advice on traffic distribution rules from the Civil Aviation Authority where such advice has been given within five years.

Mr. Robert Hughes: I cannot let the Minister get away quite as easily as that. It looks on the face of it as though amendment No. 15 is a purely technical matter laying down a limit of five years in which the rules have to be changed if the CAA is given advice. But how does that fit in with clause 29, which it amends?
Here we have clearly set out the steps to be taken, first, by the Secretary of State, and, secondly, by the CAA. It makes it clear that where the CAA has been consulted by the Secretary of State, the CAA has to proceed with the consultation process in which it discusses with airport operators likely to be affected by the rules, the operators of aircraft and organisations representing airport operators or operators of aircraft, and so forth.
I have difficulty in seeing how that works and how amendment No. 15 fits in because, in a recent exercise in which the CAA has apparently undertaken a round of consultations, not a blind bit of notice has been taken of them. I wonder whether that will happen with the traffic distribution rules.
There have been discussions — CAP 510 — about feeding into Heathrow airport in particular, although Gatwick is also part of the system of airports serving the same area of the United Kingdom. The CAA has suggested that flights from Inverness should be shifted out of Heathrow and it has also suggested that the same might happen with Dundee and Plymouth, along with a whole range of other things in the first stage. There is also a second stage where various other flights from other British airports might be altered. The consultation process took place but I do not know anyone, apart from the CAA, who said that they agreed with CAP 510. Inverness, Dundee and everyone else are outraged that despite the consultations the CAA has confirmed what it said in the first place.
There is no point putting into legislation a whole set of rules which have to be followed about consultation with operators and everyone else and then at the end of the day simply saying, "That's it. We have had the consultation but we are going ahead anyway." If the changes proposed by the CAA take place all hell will break loose, even more than has happened in the past.
I do not know how amendment No. 15 fits in, but to say that the rules are so made not later than five years after the giving of that advice means five years of uncertainty.
Either the changes will be made or they will not be made, and we must know. The Minister must tell us a bit more about how clause 29 will work. How does it fit in with his general traffic management rules in other parts of the Bill?
This is a serious matter and those of us who represent or have interests in airports outside London will not have them dominated by the needs of Heathrow, the needs of particular operators or the needs as perceived by the CAA in a completely misconceived way.

Mr. Bill Walker: My hon. Friend the Minister knows that we spent a long time on this matter in Committee and on Report and he knows that I have been in consultation with noble Lords in the other place.
I do not wish to spend a lot of time on this, but when the Minister is replying could he tell the House how this amendment relates to the capacity and demand amendments Nos. 58 and 88? There is a demand from airlines to land at Heathrow. Amendment No. 15 (b) says:
those rules are so made not later than five years after the giving of that advice".
We know about the advice given recently by the CAA on the problems likely to be faced at Heathrow. It suggested that certain services should be removed from Heathrow, but we know that under the regulations the carriers cannot be told where to go. They can be told where they cannot go, to Heathrow. How does that marry up with the problems of capacity and demand? There is an opportunity to develop further at Heathrow and at Gatwick. How does that square with the amendment? If we accept amendments Nos. 15, 58 and 99, which will have priority? Nos. 58 and 88 say that there is a requirement for the capacity to meet the demand. How is that marvellous balancing act to be achieved?

Mr. Steen: Does my hon. Friend agree that this clause and the amendment are important? They give far-reaching powers to the Secretary of State, and while we are well content that the present Secretary of State will exercise his responsibilities in a proper way, we may well be anxious about how that would be done by any future Government.

Does my hon. Friend further agree that whereas Heathrow airport is currently under-utilised, Gatwick airport is almost at capacity? There is a great danger that some unwise and badly advised future Secretary of State could get it hopelessly wrong.

Mr. Walker: My hon. Friend the Member for South Hams (Mr. Steen) has put his finger on the matter of how the official side, whether it is the CAA or the officials advising the Secretary of State, would view these things. In relation to amendment No. 15, the scheduling committee is the body which at the end of the day will determine the allocation of the available slots. That committee, certainly in respect of Heathrow, has clearly said that it is not yet unable to meet the demand.

Mr. Steen: Nowhere near it.

Mr. Walker: It says that on a daily and hourly basis there is still scope for aircraft and aircraft movements—if there is a demand for more. My hon. Friend the Minister will know that we spent a long time in Committee trying to find answers to these difficult and thorny problems. I compliment my hon. Friend the Minister on the way that he and his colleagues responded to the requests made in the House and in another place. We need some clarification from my hon. Friend the Minister on the exact relationship between amendment No. 15—if it is accepted—and amendments Nos. 58 and 88 which we will discuss later. Those two amendments are linked and cannot be separated.

Mr. Ernie Ross: I assure the House that as soon as the responsibility for transport is in the capable hands of my hon. Friend the Member for Aberdeen, North (Mr. Hughes) operators, airports and the travelling public will be well served and well looked after. Like my hon. Friend the Member for Aberdeen, North, I should like to know what amendment No. 15 adds to the Bill. All it appears to do is extend from 12 months to five years the period of uncertainty. As my hon. Friend said, CAP 522 is merely a restatement of CAP 157. No one agrees with it. It will have a tremendously damaging effect on the development of regional air services in the United Kingdom.
11 pm
On 10 July a deputation from Carlisle will come to see the Minister. They share the Dundee-Carlisle-Heathrow link with my constituents. We are greatly concerned that the Minister has a document in which the information is out-dated. The new operator on this service took over officially only in January 1986 and cannot provide that information from such a short experience of the route. Indeed, it is doubtful whether the CAA could provide it. It is nonsense when one arm of the Government, the Secretary of State for Scotland, is rightly concerned about the economic regeneration of Tayside and pumping a considerable part of his budget into regenerating the area economically and building up its attractiveness, while another arm, the CAA, threatens the viability and economic well being of the area.
The service is vital. Indeed, I travelled to London on it today. The CAA has said that it is concerned that the small companies using the slots into Heathrow should develop the interlining service. Of the 23 passengers on the flight this afternoon, three were travelling on such a service. One was going to Hamburg, one to Dusseldorf and one to


Houston. That is not a bad proportion. If the uncertainty over the route were lifted, I am sure that the present operator of Euro-Air could develop the service and make nonsense of CAP 522. At present it is carrying out a passenger survey to find out the final destination of the travelling public when they hit London. Early signs are that those travelling to London, especially British people, would prefer to come to London via Heathrow as they come in to what are termed the business areas in the M4 corridor. Gatwick would not be suitable.
I should certainly like to hear from the Minister that he does not accept CAP 522, but he will not say that tonight. I should like to hear how he thinks that amendment No. 15 will help him to ensure that the advice given to him by the CAA prior to the enactment of the legislation will permit him to make the right decision.

Mr. Steen: It is not just the scheduled services from Aberdeen, important as they are, which are worried about this clause, but all the charter traffic. The hon. Gentleman may know that some Conservative Members are taking a delegation to see the Minister. Every airline involved in charter traffic. Every airline involved in charter traffic is opposed to the powers of the Secretary of State and how they may operate against their interests. Does he agree that it would be a dreadful mistake if we did anything to damage our successful charter traffic?

Mr. Ross: I would not claim to be an expert on charter traffic, but I accept what the hon. Gentleman says. Obviously, these points have been made in Committee.
We need to hear from the Minister tonight why he thinks that amendment No. 15 will strengthen clause 29, and more particularly, how he intends to deal with the information he is given by the CAA prior to the clause standing part of the Bill.

Mr. Michael Spicer: I wholly understand this uncertainty point which has been raised by the hon. Members for Aberdeen, North (Mr. Hughes) and for Dundee, West (Mr. Ross) and my hon. Friend the Member for South Hams (Mr. Steen). However, it is only one of two schools of thought on the matter. Others, who also represent regional routes in relation to the advice produced by the CAA, say, "Let's wait and see." As my hon. Friend the Member for Tayside, North (Mr. Walker) said, it is not fully predictable whether the peak hour period at Heathrow could be extended by the scheduling committee in such a way as to allow in more flights than was the case when the CAA considered the information.
A school of thought which is represented by some of the other routes affected by this decision is that we should wait and see. My right hon. Friend and myself must first decide whether we make a speedy response. However, I also recognise the point made by the hon. Member for Dundee, West about uncertainty. He and my hon. Friend the Member for South Hams have made representations about how uncertainty would affect their own regions. In the case of the hon. Member for Dundee, West it is a route that is thin and developing, and in the case of my hon. Friend the Member for South Hams it is a route in respect of which uncertainty causes great worries.
I entirely accept that there are two sets of decisions. I must quickly produce a decision recognising these factors. We are listening intently to what the hon. Member for

Dundee, West and others are saying about the routes that have been threatened. However, I cannot give a decision tonight.
This is a simple amendment. Everything stays—there is no problem about that, except that we say that there is no point in going through the elaborate, time-consuming and expensive procedures implied in the clause more than once every five years.

Mr. Robert Hughes: The amendment states:
those rules are so made not later than five years after the giving of that advice".
If, say, in 18 months' time, the Minister decides not to change the rules, presumably that is the end of the matter and it is not open to the CAA to ask him to change his mind without at least a further examination.

Mr. Spicer: As I understood the question, that is right. It will still be open to the Secretary of State to come up with new rules within that period if the circumstances have changed, but as long as he is within the five-year period he will not necessarily consult the CAA.
It is difficult to give the precise relationships that will exist between the gathering of advice in which the CAA will be involved in relation to traffic distribution rules, the advice it gives to the Secretary of State, and the advice that it will give on capacity. But clearly there is a relationship, and I entirely accept that it will be very much part of any total advice that the CAA gives, particularly on capacity.

Mr. Steen: It would be helpful if the Minister told the House that when looking at the powers under this clause—

Mr. Deputy Speaker: Order. We are not discussing the clause. We are discussing Lords amendments to it. The clause has already been debated and decided upon by the House.

Mr. Steen: Thank you, Mr. Deputy Speaker, for reminding me of that point. That is what I meant, but I did not put it very clearly. Does the Minister agree that with regard to these Lords amendments it is important for the Secretary of State to consider carefully—each time he looks at them—that private enterprise should be taken into account and that nothing should be done to destroy any airline that is operating in the private sector—

Mr. Deputy Speaker: Order. I do not see how that arises from these amendments.

Mr. Steen: I can explain exactly how it does arise—

Mr. Deputy Speaker: Order. Apparently the hon. Gentleman is seeking to intervene in his already overlong intervention, which seems to be totally irrelevant to the amendments.

Mr. Steen: I am willing not to pursue this, as I am sure the Minister has noted my point.

Mr. Deputy Speaker: I am glad.

Question put and agreed to.

Subsequent Lords amendments agreed to.

Clause 37

IMPOSITION OF CONDITIONS BY CAA

Lords amendment: No. 21, in page 33, line 3, leave out "and 47" and insert "to (Breach of accounts conditions: criminal penalties etc.)"

Mr. Michael Spicer: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to take the following: Lords amendments Nos. 43 and 44.

Mr. Spicer: These amendments put in place a separate enforcement procedure for accounts conditions. The provisions relating to transparency of accounts in clause 38 have quite rightly been regarded as a disincentive to unfair cross-subsidy and other monopoly abuses. It is important, therefore, that any breach of the condition can be remedied swiftly to ensure that there are no gaps in the information that the clauses requires.
The existing enforcement procedures in clauses 46 and 47 work well for the conditions on prices and trading practices but are less effective in relation to accounts conditions. For example, it would be impossible to assess what loss or damage had been sustained by others as a result of a breach of an accounting condition and it is doubtful whether a compliance order could require separate publication of any information on an airport operator who had failed to disclose. That is clearly unacceptable.
The new procedure, which is modelled on equivalent enforcement provisions in the Companies Acts relating to accounts generally, will put that right. Because it allows for an airport operator to be liable for a fine and to daily default fines, there will be a strong incentive to comply with any accounts conditions enforced. If there should be a breach, the CAA will be able to take swift and effective action to ensure that all information required by the condition, but not provided, is published. I commend the amendment to the House.

Question put and agreed to.

Subsequent Lords amendments agreed to.

New Clause

ORDERS UNDER THE 1973 ACT OR 1980 ACT MODIFYING OR REVOKING CONDITIONS

Lords amendment: No. 47, after Clause 50 insert—
. — (1) Where, in the circumstances mentioned in subsection (3), the Secretary of State by order exercises any of the powers specified in Parts I and II of Schedule 8 to the 1973 Act or section 10(2)(a) of the 1980 Act, the order may also provide for the revocation or modification of any relevant conditions to such extent as may be requisite to give effect to or to take account of any provision made by the order.
(2) In subsection (1) "relevant conditions" means any conditions for the time being in force under this Part other than any conditions imposed or modified in pursuance of section 38(3) or (4).
(3) Subsection (1) shall have effect where—

(a) the circumstances are as mentioned in section 56(1) of the 1973 Act (order on report on monopoly reference) and the monopoly situation exists in relation to the carrying on of any operational activities relating to one or more airports;
(b) the circumstances are as mentioned in section 73(1) of that Act (order on report on merger reference)

and at least one of the two or more enterprises which ceased to be distinct enterprises was an airport operator; or
(c) the circumstances are as mentioned in section 10(1) of the 1980 Act (order on report on competition reference) and the anti-competitive practice relates to the carrying on of any operational activities relating to one or more airports.

(4) Expressions used in this section which are also used in the 1973 Act or the 1980 Act have the same meanings as in that

Mr. Michael Spicer: I beg to move, That this House doth agree with the Lords in the said amendment.
The amendment ensures that nothing done by the CAA under part IV of the Bill can prevent the Secretary of State for Trade and Industry from using his powers under the normal competition law.

Question put and agreed to.

Subsequent Lords amendments agreed to.

Clause 52

SCOPE OF PART V

Lords amendment: No. 50, in page 53, line 4, after "(1)" insert "Subject to subsection (2A),".

Mr. Michael Spicer: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to take Lords amendment No. 51.

Mr. Spicer: These amendments are technical and ensure continuity with respect to the statutory undertaker, status of airports between the present regime established under the Airports Act 1975 and the new arrangements set out in part V of the Bill. I beg to move.

Question put and agreed to.

Subsequent Lords amendment agreed to.

New Clause

DISPOSAL OF COMPULSORILY ACQUIRED LAND

Lords amendment: No. 53, after Clause 54 insert—
 .—(1) This section applies to the disposal of any land—

(a) which was acquired compulsorily by a relevant airport operator or any predecessor in title of his under section 54(1) or any other enactment; and
(b) which, at the time of the disposal, forms part of art airport or is attached to an airport and administered with it as a single unit or has, at any time since the date of its acquisition, formed part of an airport or been so attached and administered.

(2) A relevant airport operator shall not dispose of any land to which this section applies, or any interest or right in or over such land, with the period of 25 years beginning with the date of its acquisition as mentioned in subsection (1), unless—

(a) the disposal is for the purposes of the provision of any of the services and facilities associated with the operation of an airport; or
(b) the disposal is of a leasehold interest in the land for a term of less than 7 years; or
(c) the Secretary of State consents to the disposal.

(3) Any consent of the Secretary of State under this section may be given subject to such conditions as he thinks fit.

Mr. Michael Spicer: I beg to move, That this House doth agree with the Lords in the said amendment.
I think that the House will agree that this is a sensible amendment. The new clause enables the Secretary of State to apply Crichel Down rules to the disposal of land that has been compulsorily purchased.

Question put and agreed to.

Clause 61

PROVISION OF SPECIAL ACCOMMODATION AT AIRPORTS

Lords amendment: No. 54, in page 62, line 32, at end insert—
() give the airport operator a direction requiring him to take such steps as may be specified in the direction for the purposes of, or in connection with, the use of such accommodation and facilities by such persons;

Mr. Michael Spicer: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to take Lords amendments Nos. 55, 56, 74 and 75.
I inform the House that Lords amendments Nos. 56, 74 and 75 involve privilege.

Mr. Spicer: These amendments clarify the Secretary of State's powers of direction over airport operators to provide and/or operate special facilities at airports. They also add a power for the Secretary of State, with the consent of the Treasury, to make grants to compensate airport operators for costs that they might incur complying with such directions. The amendments provide for any sums paid in compensation to come from money provided by Parliament. The Government's intention continues to be to pay airport operators additional operating costs in running special facilities. The amendments make the power behind that intention explicit in the Bill. I commend the amendments to the House.

Question put and agreed to.

Subsequent Lords amendments agreed to.

Mr. Deputy Speaker: I will cause the appropriate entry to be made in the Journal.

New Clause

MONITORING OF AIRCRAFT MOVEMENTS

Lords amendment: No. 57, after Clause 61, insert:
 ,—(1) Where an airport is designated for the purposes of section 78 of the 1982 Act (regulation of noise and vibration from aircraft), the Secretary of State may, after consultation with the airport operator, by order require him—

(a) to provide, maintain and operate such equipment as is specified in the order (in accordance with any instructions so specified) for the purpose of monitoring the movements, within an area so specified, of aircraft on flights to and from the airport, and
(b) to make to the Secretary of State such reports as are so specified with respect to the movements monitored by the equipment in pursuance of paragraph (a), and to permit any person authorised by the Secretary of State for the purpose to inspect the equipment on demand at any time;

and it shall be the duty of the airport operator to comply with the requirements of the order.
(2) Any reference in subsection (1) to the movements of aircraft shall be read as a reference to the routes taken by them measured by reference to both direction and height.
(3) Subsection (9) and (10) of the said section 78 (enforcement) shall apply for the purposes of this section as

if, in subsection (9) of that section, any reference to subsection (8) of that section were a reference to subsection (1) of this section.

Mr. Michael Spicer: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to take Lords amendments Nos. 85 and 91.

Mr. Spicer: The new clause enables the Secretary of State, after consultation with the airport operator, to impose on him a requirement to monitor the movement of aircraft—that is, their direction and height—on flights to and from the airport and to make reports. This will be done at the airport operator's expense, but it is a matter for the airport operator whether he chooses to cover the costs of installing and operating the monitoring system through airport user charges.
The new clause will enable compliance with the noise preferential routes to be more effectively monitored. That information will enable us to assist airlines in making greater efforts to keep to noise preferential routes. That, in turn, will make for the more effective limitation of aircraft noise and disturbance around designated airports. The enforcement of compliance will, of course, remain with the Government.

Mr. Robert Hughes: I welcome the new clause as one of great importance. Those of us with constituency interests in and around airports or the flight paths of aircraft continually receive complaints about aircraft noise and there has been a feeling that proper checking has not been taking place.
I hope that the Minister will confirm that helicopters, in particular, and not just fixed wing aircraft, will be covered by the provisions. Certainly in my constituency the biggest problem is the large number of complaints about helicopters not following the agreed preferred routes and not complying with the rules, but when we take the complaints up we are often told that the constituent is wrong abut where the helicopter was flying.
Provided that helicopters are covered, I believe that they must be, I welcome the help provided by the new clause in relation to monitoring, and so on, and I give it a warm welcome.

Mr. Steen: First, I must declare an interest in British Island Airways, which flies noisy planes that have been quietened by hush kits. I must also declare an interest in British Midland and in its subsidiary companies, Loganair and Manxair. There is considerable concern about the new clause. Noise is rather like security in that there is no limit to the amount of money that could be spent on abatement and safety.
Can the Minister give an undertaking that the clause will not be used to drive the smaller airlines, which often use older planes, out of business by insisting upon noise abatement equipment which is so expensive to install? I remind the Minister that British Island Airways was asked to install hush kits on its BAC 111 jets at a price of about £100,000 a plane, which added up to over £1 million for its fleet. According to the monitoring equipment, the actual noise on take-off is the same. The Secretary of State must not be persuaded to exercise the powers in this clause in such a way that he insists on more and more equipment being added to aircraft which will in theory make them quieter but which means that beyond the perimeter of the airport the sound to the public is exactly the same.
The clause gives the Secretary of State too much power which, in the wrong hands, could be exercised in the wrong way. Can the Minister give some reassurance to the smaller airlines, which cannot afford the mammoth expenditure that the state airlines can afford on new, hush-kitted planes, that they will get help from him if he insists on them increasing noise prevention?
The point must be made in the House that whereas the penalties on our airlines are considerable if they fly planes which go beyond certain noise levels, planes from Africa, for example, can continue to fly into Heathrow and into Gatwick even though they are noisier than the planes that our airlines are allowed to fly. I think particularly of the 707s, which our airlines are no longer allowed to fly but which Nigerian and Cyprus airlines will be allowed to fly for another two years. That is discrimination against our airlines.
Perhaps in his reply the Minister can say something about his wish not to discriminate against our smaller airlines or in favour of Third world countries which are today flying noisy planes into Heathrow and Gatwick.

Mr. Michael Spicer: I shall be happy to discuss that matter in detail with my hon. Friend. We have had an Adjournment debate on the subject initiated by him or perhaps by my right hon. Friend the Member for Taunton (Sir Edward du Cann). It would be out of order to deal with the matter now because the new clause deals specifically with compliance with noise preferential routes.
I am grateful for what the hon. Member for Aberdeen, North (Mr. Hughes) has said. I have felt strongly about the matter for some time. It seems nonsensical to have noise preferential routes and to have no means of ensuring that they are adhered to. Although costs will be involved, I am grateful for the support of the hon. Gentleman on this important new clause. I can give the assurance the hon. Gentleman sought that helicopters are included.

Question put and agreed to.

Subsequent Lords amendment agreed to.

New Clause

DUTY OF CAA WITH RESPECT TO IMPLEMENTATION OF RECOMMENDATIONS CONCERNING AIRPORT CAPACITY

Lords amendment: No.58, after clause 61 insert—
.—(1) If, after considering any recommendations made to him by the CAA in pursuance of section 16(2) of the 1982 Act (recommmendations concerning airport capacity), the Secretary of State so directs, the CAA shall take such steps as it considers appropriate for the purpose of encouraging or facilitating the provision (whether by an airport operator or any other person) of any facilities or services that are necessary for the implementation of those recommendations.
(2) The steps taken by the CAA in pursuance of subsection (1)—

(a) may, without prejudice to the generality of that subsection, include the furnishing of information, the provision of assistance to persons requesting it and the provision of advice (whether or not requested); but
(b) shall not include the carrying out of any works of construction or alteration or the defraying of, or the making of any contribution towards, expenses incurred by any other person in carrying out any such works.

(3) Before embarking on the performance of its duty under subsection (1) with respect to any recommendations the CAA shall consult the airport operator in the case of any relevant airport as to the manner in which that duty is to be performed by the CAA.

(4) Without prejudice to the generality of section 11 of the 1982 Act, a scheme or regulations under that section may make provision for charges to be paid in respect or the performance by the CAA of its duty under subsection (1) above with respect to any recommendations, and for such charges to be paid by—

(a) the airport operator in the case of any relevant airport, and
(b) any person for whom assistance or advice has, at his request, been provided by the CAA in pursuance of that duty;

but if such provision is not by any such scheme or regulations the CAA shall be entitled to recover an amount or amounts in respect of any expenses reasonably incurred by it in performing that duty from such one or more persons falling within paragraphs (a) and (b) above as the CAA considers appropriate.
(5) An airport is a relevant airport for the purposes of subsection (3) or (4) if—

(a) the recommendations referred to in that subsection relate to the airport, or
(b) the airport is subject to economic regulation under Part IV, and it and any new airport to which those recommendations relate would be airports serving the same area in the United Kingdom;

and the reference in paragraph (b) above to airports serving the same area in the United Kingdom shall be construed in accordance with section 29(6).
(6) Section 4 of the 1982 Act applies in relation to the performance by the CAA of its functions under this section.

Mr. Michael Spicer: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to consider Lords amendment No. 88.

Mr. Spicer: Under section 16 of the Civil Aviation Act 1982, the CAA already has a duty to consider the need for airport capacity and to make recommendations to the Secretary of State. Under the new clause which amendment 58 puts into the Airports Bill, The Secretary of State in receipt of such a recommendation is able to direct the CAA to take appropriate steps to encourage or facilitate the provision of such facilities and services as are necessary to give effect to its recommendations.
The Government regard this additional provision in the Bill as a useful extra stimulus to the clear economic incentive that airport operators already will have to provide adequate capacity. The matter was debated by several of my hon. Friends and was also raised by the hon. Member for the Isle of Wight (Mr. Ross) in Committee. Thus, we have found a way of accommodating the thrust of the argument put to us.

Mr. Robert Hughes: I have one question to ask in order to get things clear in my mind. Are we talking about not only runway facilities but terminal capacity? That is as important, as, and sometimes more important than, runway, capacity. Yesterday, I went to Gatwick and although I would not like to say that there was chaos and confusion, the terminal was jam-packed with people. I understand that it has been decided not to proceed with the second terminal at Gatwick in the meantime.

Mr. Spicer: The position is that there is no approval for a second runway but the BAA has almost completed a second terminal at Gatwick.

Mr. Hughes: In that case, I have my facts slightly mixed up. But on Tuesday, people certainly complained to me about the inadequacy of the terminal facilities at Gatwick. There is certainly a need for an extension. I have obviously got the second runway mixed up with the second terminal. I am glad that my hon. Friend the Member for Dundee,


West (Mr. Ross) has gone, as otherwise he would not make flattering comments about how I would perform as Secretary of State for Transport.

Mr. Bill Walker: I welcome the amendments. They are encouraging after our long uphill struggle to find a form of words that would meet the wishes to those concerned about the problem of demand and capacity. I have read the words carefully, and I compliment my hon. Friend the Minister and his staff on what they have achieved. He will realise that coming from me, that is saying quite a lot after all our battles in Committee.
The new clause refers to
an airport operator or any other person".
An airport operator may have a sound reason, such as wishing to maximise profits, for not putting forward the necessary plans and proposals to meet the demand in relation to terminals. Indeed, runways could fall into the same category. If that need was not met and the airlines, or anyone else, came forward with proposals to that end, I hope that the Department, the CAA and the Secretary of State would view that favourably. That is the assurance that all the airlines, and the passengers want.
Earlier we spoke about the problems of the airlines that had been working under a threat. But that threat would be substantially diminished if someone could say, "Of course we are prepared to invest in a new terminal wherever it is, or whatever facility is required." If that is what the new clause means, it will be very well received throughout the aviation industry. It was the uncertainty about no one being required to do that that worried people. However, the amendment represents a big improvement to the Bill. Of all the improvements and changes made, it is probably the one that the airline industry wanted most. I thank my hon. Friend for that.

Mr. Steen: I thank you, Mr. Deputy Speaker, for your tolerance, indulgence and good nature, which I shall not test further. I recognise the contribution of my hon. Friend the Member for Tayside, North (Mr. Walker) in getting the clause in. He and I, along with Members of the House of Lords, battled to see the clause in the Bill. I pay tribute on the Floor of the House to my hon. Friend for his perserverance. Perhaps it is appropriate that he dresses as he does tonight to show what a fighter he has been for that clause. The House pays tribute both to him and to the Secretary of State for the fine job they have done in draftng the clause and getting it absolutely right. The airline industry has a great debt to pay.

Mr. Michael Spicer: In response to the question by the hon. Member for Aberdeen North (Mr. Hughes), terminals will be included in the definition of capacity. As my hon. Friend the Member for South Hams (Mr. Steen) said, my hon. Friend the Member for Tayside, North (Mr. Walker) fought the issue strongly. We resisted making the concept "or anyone other than the operator" compulsorily in the Bill. My hon. Friend the Member for Tayside, North was quite right to say that the phrase "or any other person" introduces a new concept—a concept which he espoused during the Committee stage. I thank him for the kind remarks he made. I think that we have seen the

efficacy of the revising powers of the other place, because the other place has come up with a form of words which improves the Bill considerably.

Question put and agreed to.

New Clause

EXTENSION OF SHOPS (AIRPORTS) ACT 1962

Lords amendment: No. 59, after clause 61 insert—
 . Section 1 of the Shops (Airports) Act 1962 (exemption of traders at certain airports from restrictions under Part I of the Shops Act 1950 on hours of closing) shall have effect in relation to the provisions of Part IV of the Shops Act 1950 (Sunday trading) as well as in relation to the provisions of Part I of that Act; and accordingly, in subsection (1) of that section, after "hours of closing)" there shall be inserted "and of Part IV of that Act (which relates to Sunday trading)".

Mr. Michael Spicer: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to take Lords amendment No. 103.

Mr. Spicer: Shops at designated airports are already exempt from the restrictions on weekday opening hours imposed by the Shops Act 1950. This clause and the consequential amendment extend that exemption to cover the Sunday trading restrictions.

Mr. Robert Hughes: I wonder what the new clause means—

Mr. Spicer: They can carry on business at any time.

Mr. Hughes: It is said, from a sedentary position, that they can carry on business at any time. Is it a further extension of an exemption, or does it put right something which has been wrong for some time? If that is so, I would not accept it without question. I do not want to detain the House, but I ask the hon. Gentleman whether the new clause has been inserted because the Government had such a disastrous defeat on Sunday trading generally. Why has it been necessary to introduce the new clause? Is it a major extension? Why do we need it?

Mr. Michael Spicer: It simply confirms, in statute, the existing practice at the airports.

Question put and agreed to.

Subsequent Lords amendment agreed to.

Clause 64

FURNISHING OF INFORMATION ETC. TO CAA

Lords amendment: No. 61, in page 64, line 10, leave out "an airport operator" and insert "any person".

Mr. Michael Spicer: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to take Lords amendments Nos. 62 to 67 and 97 to 99.

Mr. Spicer: The amendments are of a technical nature. Amendments Nos. 61 and 62 are consequential on the group of amendments which the House accepted starting with amendment No. 11.

Question put and agreed to.

Subsequent Lords amendments agreed to.

Clause 66

SUPPLEMENTARY PROVISION RELATING TO TRANSFER SCHEMES

Lords amendment: No. 68, in page 66, line 6, at end insert—
(1A) A scheme under section 1 or 14 may—

(a) provide that any functions of the transferor under any statutory provision not contained in this Act shall, to the extent to which that provision relates—

(i) to property transferred by the scheme, or
(ii) to any undertaking of the transferor, or part of such an undertaking, so transferred,

be transferred to the transferee under the scheme; and
(b) define any such functions—

(i) by specifying the statutory provisions in question,
(ii) by referring to all the statutory provisions (not contained in this Act) which relates to the property, or to the undertaking or part of the undertakings, to be transferred by the scheme, or
(iii) by referring to all statutory provisions within sub-paragraph (ii), but specifying certain excepted provisions".

Mr. Michael Spicer: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to take Lords amendments Nos. 69 to 71.

Mr. Spicer: Amendment No. 70 is principally a clarificatory amendment. When property is to be transferred under the provisions of clause 14, it is the Government's expectation that the freehold will be transferred where the freehold is owned. That is what we, on the whole, expect. There may, however, be exceptional cases where it would be appropriate to create and transfer the leasehold interest leaving the freehold interest with the parent authority. The amendment is designed to put it beyond doubt that in such exceptional cases the transfer of property might include the transfer of a leasehold interest.
Amendments Nos. 68, 69 and 71 are technical and ensure continuity in respect of the byelaws that apply at airports.

Question put and agreed to.

Subsequent Lords amendments agreed to, some with special entry.

Drug Trafficking Offences Bill

Lords amendments considered.

Title

Lords amendment: No. 1, in line 3, after "trafficking" insert
to make provision about the supply of articles which may be used or adapted for use in the administration of controlled drugs or used to prepare a controlled drug for administration".

The Parliamentary Under-Secretary of State for the Home Department (Mr. David Mellor): I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker (Mr. Harold Walker): With this Et will be convenient to take Lords amendments Nos. 154 and 184.

Mr. Mellor: In introducing this stage of the Bill, I should like to express my appreciation to the other place for its careful consideration of this measure and the all-party spirit it showed, because very few Scotsmen were involved in consideration of the Bill.
It might be for the convenience of the House if I say that the opportunity was taken during consideration of the Bill in the other place to make certain technical changes to clarify some of its points and to improve its drafting. It might also be convenient if I move those amendments formally. Obviously, if an hon. Member wants to raise points, they could be dealt with. Some substantive changes are worthy of a sentence or two, and I know that some of my colleagues might want to comment on them. This group of amendments is certainly one of those.
The amendment makes it an offence to supply or to offer to supply articles which may be used in the administration of a controlled drug or to prepare a controlled drug for administration. The prosecution will, however, have to prove that the supplier believed that the article he sold would be used in connection with the unlawful administration of a controlled drug, and that will ensure that shopkeepers who innocently sell everyday items which are then used for drug taking have nothing to fear from the new offence. It is on that basis that, I am glad to say, the Retail Consortium supports this measure.
I should point out also, because of the legitimate concern about this aspect, that this new offence specifically excludes the sale of hypodermic syringes or needles because of the increased risks of AIDS and hepatitis, which would result from the re-use of those items.
The new offence will apply to Scotland—the shadow Secretary of State for Scotland, the hon. Member for Glasgow, Garscadden (Mr. Dewar), can prick up what he pleases to call his ears—and Northern Ireland as well as to England and Wales.

Mr. Robin Corbett: I reaffirm and remind the Under-Secretary of State—I am sure that I do not have to—that this is one of these rare occasions on which the Bill has gone through not simply with all-party support but with enthusiastic all-party support, because we are wholly with the Government on the need to deal heavily wth the drug traffickers.
We specifically welcome these amendments which are in a narrow sense designed to deal with the problem of cocaine kits. The Under-Secretary of State needs no


reminding from me that probably one of the most important aspects of the campaign which we must wage against drug traffic abuse is that we must try to stop young people starting. These amendments are part of that process. There is no need for us to hound shopkeepers who innocently sell the individual items which go together to make up the kits but, at the same time, it does no harm, in fact it is probably good, to try to recruit them to our side in our national effort to try to get on top of this menace which literally threatens a generation of our young people.

Mr. Alex Carlile: I congratulate the Minister on the way in which he has ensured that the Bill has had a fair passage through the other place. Not only has it had a fair passage but it has come through the other place much improved, particularly by the groups of amendments we are considering now. The problem which can sometimes arise in dealing with drugs is that as we tackle the issues, even though we sometimes tackle them very quickly, as has happened here, we still find ourselves one step behind those wicked people who are determined to peddle dangerous drugs to the young.
I hope that the Minister will assure the House—I am sure that he will, because I know that his interest in this problem is deep and genuine—that the Government will lose no opportunity to tighten up the law to catch drug peddlers. I hope that he will confirm that these provisions are capable of dealing with people who might try to sell kits which would enable people to use crack, a heroin substitute, as I understand it, which has become rife in the United States and has now reached these shores and that he will continue to keep under review any further substitutes which become known to be prevalent in the streets of our towns and cities.
I share the view of the hon. Member for Birmingham, Erdington (Mr. Corbett) that the Bill has been improved in the other place and that there will be no need for any controversy tonight in dealing with these or any other amendments.

Mr. Mellor: I am grateful to the hon. Member for Birmingham, Erdington (Mr. Corbett) and the hon. and learned Member for Montgomery (Mr. Carlile), who speak for the official Opposition and the Liberal party, for what they have said and the consistent help they have given. The hon. Member for Erdington, in his work on the Select Committee and now as Front Bench spokesman for the Opposition, has been a tower of strength on this and other aspects of the drug problem and at several stages I have appreciated the legal expertise and prowess of the hon. and learned Member for Montgomery.
I can say to the hon. and learned Member for Montgomery that crack is a form of cocaine which is stronger than normal cocaine and is heated up and abused in that way. Any kit that facilitated that would be caught because we decided not to restrict the amendment to cocaine kits as such but to include any means of facilitating the unlawful use of controlled drugs. We thought that that was better and would help to avoid the point that the hon. and learned Gentleman rightly made, that we always seem to be one step behind. Perhaps in this case we are putting ourselves one step ahead.

Question put and agreed to.

Subsequent Lords amendments agreed to.

Clause 2

ASSESSING THE PROCEEDS OF DRUG TRAFFICKING

Lords amendment: No. 6, in page 3, leave out lines 14 to 16 and insert
the values of the payments or other rewards

Mr. Mellor: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to discuss Lords amendments Nos. 8, 14, 19, 20, 22, 25, 27 to 37, 39, 45, 49, 52, 55 to 57, 59, 60, 63, 66 to 72, 77, 79, 84, 86, 87, 96 and 143.

Mr. Mellor: When earlier considered by the House the Bill provided for a confiscation order to be satisfied from property available in respect of the defendant. That included property transferred to third parties for significantly less than full value, provided that the transfer had taken place during the previous six years or the property could be shown to represent the proceeds of drug trafficking. Where the third party has subsequently transformed that property into something else, however, we want to ensure that the courts will be able to order the confiscation of the substitute property or assets of equivalent value; that is why the change has been made and I think that it is substantial.
The second major change in the amendments is to meet a point raised by the hon. Member for Birmingham, Erdington (Mr. Corbett), who was anxious that increases in value should be fully reflected in the confiscation order. We now provide that in assessing the value of any payment, reward or gift, the court will be able to take either its value at the time of receipt, adjusted for inflation, or, where the person concerned still holds the property or assets directly or indirectly acquired with it, its current value, whichever is the greater. That meets the hon. Gentleman's point.

Mr. Corbett: I thank the Minister for responding to the points that we raised in earlier debates. Perhaps I can put it more colloquially. I have been heard to state that, when we catch and convict drug traffickers and then go into the business of trying to get hold of their assets, I want to strip them down to their underpants. If they then try to transfer their underpants to a third party, I want those as well.

Questions put and agreed to.

Subsequent Lords amendments agreed to.

Clause 5

CONFIRMATION ORDERS: DEFINITION OF TERMS

Lords amendments: No. 23, in page 6, line 15, leave out "or".

Mr. Mellor: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to take Lords amendments Nos. 24, 41, 44, 53, 82, 93, 97 to 102, 119 to 125, 127 to 130, 138, 139, 162, 163, 180, 182, and 185.

Mr. Mellor: In deference to our friends from the north—

Mr. Corbett: Not just from the north, but from Scotland

Mr. Mellor: Indeed, even Scotland.
I should like to make a few points in commendation of the amendments. Their main effect is to provide that restraint and confiscation orders made by courts in England and Wales can be registered in the Court of Session and he enforced by the court against assets held in Scotland. Receivers appointed under the Bill will be able to exercise their powers in Scotland. Scottish police and customs officers will have the same powers in relation to the investigation of drug trafficking as their colleagues in England and Wales. The amendments also regulate the relationship between drug trafficking proceedings and Scottish sequestrations in the same way as the amendments that we shall consider shortly, which deal with insolvency in England and Wales.
The provisions ensure that Scotland does not become a haven for the assets of drug traffickers operating south of the border in the period before its own separate legislation is introduced. That legislation, in its turn, will contain similar provisions for the enforcement of orders made by Scottish courts against assets held in England and Wales.

Mr. Keith Raffan: As the hon. Member for Glasgow. Garscadden (Mr. Dewar) will remember, we entered into an exchange during the Queen's Speech debate, when he said that Scots law was ahead of English law. He will be as concerned as I am now to ensure, particularly as he once represented part of the city in which I was born and was once my Member of Parliament, that Scots law does not lag behind English law. That is basically the point that I want to raise with the Minister.
Although, by the amendment, we are preventing Scotland from becoming a refuge for people trafficking in drugs in England, I am concerned that the other way round does not still apply and that effective cross-border co-operation is still only one way. I want my hon. Friend the Minister to confirm that cross-border co-operation will be both ways. I am sure that the hon. Member for Garscadden will endorse my second point wholeheartedly. It is also important that the separate legislation to be brought into Scots law is brought in as soon as possible in the next Session.

Mr. Donald Dewar: I do not know whether the hon. Member for Delyn (Mr. Raffan) is an asset that we have exported from Scotland, but, if so, I am prepared to put up with the prospect of permanent alienation.
I regret to say that I have not given much attention to the Bill, because it is largely English. The Minister has just confirmed that the clauses that affect Scotland, although they are formidably long and there are many references to them in the Lords amendments, cover the enforcement of English confiscation orders by the Scottish courts. It will ensure that there is no escape clause or refuge which would allow someone to shift into Scotland assets produced by this unfortunate and wicked trade and to escape orders that may be made against him south of the border. I presume that this thicket of amendments merely achieves that, and at this time of night — especially in the presence of the Deputy Chief Whip, who is looking distinctly tired at the sight of me at the Dispatch Box— I shall not discuss the Scots law of sequestration.
Perhaps the Minister can help us with the point made by the hon. Member for Delyn. As he no doubt knows, we

are in a curious position in Scotland. He will have followed the debates on the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985, which introduced punitive fines based upon putative profits in drug trading, which was put on the statute book only a year or 18 months ago. In the long and difficult debate about the criteria which the courts should apply in deciding how to compute those fines, Scottish Ministers made it clear that confiscation orders would not be possible in Scots law for some time. They gave us many plausible explanations, including the long digestion period and the amount of research that would have to be done, for proceeding down the fines route.
Will the Minister give us an assurance that the Scottish Office has changed its mind on that point? If so, we can expect legislation parallel to this in Scotland. But it is a complete change of course, because we were told during proceedings on that Act that it would be impractical and impossible. It is important that the Minister clears up that point, so that we know where we stand.

Mr. Mellor: I am delighted that the hon. Member for Glasgow, Garscadden (Mr. Dewar) should have intervened, in a brief cameo role, in our proceedings. It is as though Lord Olivier had wandered into a dog food commercial. His presence tonight is touching.
I must express momentary satisfaction, after three and a half years as a Home Office Minister always being told how perfect Scots law is, that for one brief flicker of time we are ahead of the Scots. That is at least something. But I understand that Scottish legislation will be introduced next Session. The hon. Gentleman would not expect me to put myself forward as an authority on precisely what it will contain, but I am given to understand that it will mirror the proposals contained in this Bill, and I shall draw the attention of my colleagues in the Scottish Office to the hon. Gentleman's points. They will wish to curb his loquacity next Session, and the best way to do that is for me to agree with him now.

Question put and agreed to.

Subsequent Lords amendments agreed to.

Clause 7

CASES IN WHICH RESTRAINT ORDERS AND CHARGING ORDERS MAY BE MADE

Lords amendment: No. 42, in page 10, line 2, leave out
by virtue only of subsection (2) above
and insert
before proceedings have been instituted

Mr. Mellor: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to take Lords amendments Nos. 48, 61, 62, 64, 73 and 179.

Mr. Mellor: The amendments allow the prosecution as well as the holder of the property to seek a variation in a restraint or charging order. We think that this additional flexibility will be welcome to the House.

Question put and agreed to.

Subsequent Lords amendments agreed to.

Clause 17

ASSISTING ANOTHER TO RETAIN THE BENEFIT OF DRUG TRAFFICKING

Lords amendment: No. 103, in page 17, line 37, at beginning insert
Subject to subsection (2A) below".

Mr. Mellor: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to take Lords amendments Nos. 106, 107, 109, 111 to 115 and 151.

Mr. Mellor: The amendments implement the recommendations of the Select Committee on Home Affairs. The new provisions will be of considerable assistance to the investigating authorities. I take the opportunity to thank the Select Committee for its detailed and useful reports, which have been invaluable in the development of the Bill.
The amendments provide also that the financial institution will be exempted from the laundering offence if it continues to handle the suspect's account after informing the police or Customs of its suspicions. Otherwise, the bank would have little option but to close the account, thus forewarning the client that he was under suspicion.
Another amendment arises out of a useful discussion in Committee about the constitution of the new offence. It was said that clause 17 as originally drafted could have had the effect of catching honest bank staff who might inadvertently handle the proceeds of drug trafficking. An amendment that was agreed in another place removes the objective test of having reasonable grounds to suspect. The prosecution will have to prove actual knowledge or suspicion on the part of the defendant that the person with whom he was dealing had been engaged in drug trafficking. I hope the amendments commend themselves to the House.

Mr. Corbett: May I join the Minister in half thanking myself for the advice of the Select Committee on Home Affairs?
The Minister referred to protecting bank staff who might inadvertently be caught up. The changes that have been proposed give the protection needed to those who work in banks and other financial institutions, although in no way debarring them from assisting us in the general purposes of the Bill.

12 midnight

Mr. Geoff Lawler: Amendment No. 111 took up a lot of debate in the other place. It is an innovative amendment and a great improvement on what was before the purely reactive role of financial institutions. Two points can be made. First, rightly, the Government have sought to reject any idea of compulsion along the lines that appertain in America. I hope that the Minister will assure us that that will continue to be the case. Certainly, it would prove to be unworkable.
Secondly, one of the noble Lords in the other place said that the amendment would have little effect because bank managers or managers of other financial institutions would not know what to look for. He asked how their suspicions would be aroused that money that was being laundered which originated from drug trafficking. We cannot expect all bank managers suddenly to be budding

Maigrets, but even a budding Clouseau would know what to look for if properly alerted. Therefore, to make the amendment effective, may we have the assurance of my hon. Friend the Minister that bank managers will have some proper brief and traning in order that their suspicions might be aroused where appropriate?

Mr. Raffan: I welcome the amendment. We are bound to welcome any way in which the controls in the Bill on the laundering of money are strengthened and that lies at the core of it. I am not sure that I agree entirely with my hon. Friend the Member for Bradford, North (Mr. Lawler) with regard to further powers. I hope that my hon. Friend the Minister will be able to assure the House that he will keep a close eye on the effectiveness of this amendment and the way in which it is implemented to make sure that it works. If it does not we must consider taking further powers to require banks to disclose deposits and transactions above a certain amount. I am well aware of the burden that that would impose on British banks, compared with American banks, given the larger amount of cash transactions that take place in Britain compared with the United States, but, as I said on Second Reading and subsequently in Committee, anything that we can do to dramatically slow down this evil trade should be done.

Mr. Mellor: I am grateful to my hon. Friends the Members for Bradford, North (Mr. Lawler) and for Delyn (Mr. Raffan) and the hon. Member for Birmingham, Erdington, (Mr. Corbett). Yes, of course, as my hon. Friend the Member for Delyn says, we think that what we have done at the moment is adequate, but the matter will be kept under review, and, if necessary, further steps will certainly be taken. We are not attracted to the American disclosure arrangement which has been more honoured in the breach than anything else, and has caused enormous difficulties in the attempt to bring about compliance.
I can tell my hon. Friend the Member for Bradford, North that there is certainly no question of compelling a bank to disclose. Training must be a matter for the banks. Given the enthusiasm with which they have sought to facilitate the introduction of the legislation — I pay tribute to them for that — I should have thought that they would want to include in their staff training the clearest warnings to staff as to how to behave when confronted with the kind of situation that is envisaged in these arrangements.

Question put and agreed to.

Subsequent Lords amendments agreed to.

New Clause

AUTHORISATION OF DELAY IN NOTIFYING ARREST

Lords amendment: No. 152, after clause 24 insert—
. — (1) In section 56 of the Police and Criminal Evidence Act 1984 (right to have someone informed when arrested), at the beginning of subsection (5) there is inserted "Subject to subsection (5A) below" and after that subsection there is inserted—
(5A) An officer may also authorise delay where the serious arrestable offence is a drug trafficking offence and the officer has reasonable grounds for believing—

(a) that the detained person has benefited from drug trafficking, and
(b) that the recovery of the value of that person's proceeds of drug trafficking will be hindered by telling the named person of the arrest".



(2) In section 58 of that Act (access to legal advice) at the beginning of subsection (8) there is inserted "Subject to subsection (8A) below" and after that subsection there is inserted—
(8A) An officer may also authorise delay where the serious arrestable offence is a drug trafficking offence and the officer has reasonable grounds for believing—

(a) that the detained person has benefited from drug trafficking, and
(b) that the recovery of the value of that person's proceeds of drug trafficking will be hindered by the exercise of the right conferred by subsection (1) above."

(3) In section 65 of that Act (interpretation)—

(a) after the definition of "appropriate consent" there is inserted—

""drug trafficking" and "drug trafficking offence" have the same meaning as in the Drug Trafficking Offences Act 1986", and

(b) at the end of that section there is inserted "and references in this Part to any person's proceeds of drug trafficking are to be construed in accordance with the Drug Trafficking Offences Act 1986".

(4) Without prejudice to section 20(2) of the Interpretation Act 1978, the Police and Criminal Evidence Act 1984 (Application to Customs and Excise) Order 1985 applies to sections 56 and 58 of the Police and Criminal Evidence Act 1984 as those sections have effect by virtue of this section".

Mr. Mellor: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Corbett: I have no wish to detain the House on amendment No. 152, but I wish to place on record the attitude of the Labour party to these and related provisions in The Police and Criminal Evidence Act 1984. The powers proposed by this amendment are, in terms of civil liberties, quite draconian. The Bill gives the police power to delay notification of the arrest and detention of somebody for up to 36 hours for reasons which, I quickly add, are wholly justified in the circumstances.
When saying that in some circumstances this kind of intrusion into civil liberties is justified, we have to be careful. I know that the Minister understands that we are not looking for bouquets or roses, but I want to remind him again that the reason why we have gone along with this is that we are determined, as are the Government, to use every weapon in our armoury to deal effectively with people who not only make vast fortunes out of drug trafficking, which is had enough, but do it by ruining young lives. Every hon. Member wants to try to protect and save those young lives.

Mr. Alex Carlile: Is the Minister satisfied that the powers contained in the new clause will make it virtually impossible for friends, relatives, dishonest professional advisors and others to dispose successfully of assets in the short period after arrest? I addressed that matter on Second Reading and it has been of considerable concern throughout the proceedings on the Bill. It seemed to be a lacuna in the original Bill and I hope that the Minister will give an undertaking that if the new clause does not work, new measures will be brought before the House.

Mr. Mellor: I admired the courage of the hon. Member for Birmingham, Erdington (Mr. Corbett) in stopping you, Mr. Deputy Speaker, in full flow. You demonstrated to my satisfaction tonight once again that Phyllosan really works.
I am grateful to the hon. Gentleman for recognising that this measure is necessary. It was equally proper for him to point out that this is a limited incursion into what

was otherwise a major step forward in The Police and Criminal Evidence Act 1984, allowing much wider access to professional advice. The hon. and learned Member for Montgomery (Mr. Carlile) put his finger on it when he said that if we are to be successful in dealing with the problem of the large assets of drug traffickers we must be able to act peremptorily to prevent them from being shifted out of our jurisdiction. We cannot expect to make watertight arrangements with every country to which assets could be moved, so that they will be in reach of our courts. I am as satisfied as I can be that these arrangements make it possible to prevent leakage of information. Although ways can always be found, we make it difficult for traffickers and that is what we all want to do.

Question put and agreed to.

Subsequent Lords amendments agreed to.

Clause 28

INTERPRETATION

Lords amendment: No. 155, in page 26, leave out lines 29 to 32.

Mr. Mellor: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to take Lords amendments Nos. 156, 157, 161, 164, 165, 166, 169, 170 to 174, 176 to 178 and 183.

Mr. Mellor: The amendments relate to the interpretation clause and I shall not speak at great length on their merits. Suffice it to say that this is the final moment of consideration of the Bill. As it moves on to the statute book, I am aware that it does so with the warm support of all who participated in debates in both Houses. I wish to express my gratitude for all the help and support I have received from many colleagues in all parties in trying to get the legislation right. We have not been afraid to make changes even at the last moment and to incorporate in the Bill new concepts as they appeared to be appropriate.
I hope that we can all take some pleasure in that we have joined together to bring on to the statute book legislation which has a tremendous amount of hope pinned on it. As we have discovered, it is not enough of a deterrent to drug traffickers merely to lock them up. It is absolutely crucial to find an effective way of depriving them of the massive profits they can make. While I do not make the claim for any piece of legislation that it can succeed in every case, we have taken a major step forward tonight and I am glad to have played my part in seeing the Bill on to the statute book.

Mr. Corbett: I thank the Minister for what he has just said. I wish to make clear the complete commitment of all sides of the House and millions beyond it to waging war as effectively as we can against the menace of drug abuse. No words can in any way exaggerate the extremely dangerous threat which drug abuse poses to a generation of our young people. Regrettably, sections of them seem at war with themselves, and others with society generally. We must try in whatever ways we can to deal with that. One way is the Bill, which makes it clear to those before our courts and those convicted of these vile offences that we shall do our best through this democratically elected assembly and through our courts to ensure that they will not enjoy the fruits of this vile, destructive trade.
In many ways this is a historic Bill, and it is regrettable in the sense that there is a need for it. It signals to those who are engaged in those activities that we are collectively and nationally serious about tackling this problem in this way.
My final point is something that I have told the Minister before, and I now repeat it on behalf of the Opposition. We stand ready to co-operate in any ways open to us with the Minister and his colleagues to give any help that we can towards what should be a national campaign. This should not be a party political matter. We should be joining together— the parties represented in this House, parents, the majority of young people, who do not use drugs, community groups, trade unions, business, commerce and everyone. We all have a vested interest in getting on top of the problem and beating back this vile tide of drugs.

Mr. Lawler: I wish to make a brief point, without being churlish after such endorsements. It relates to Lords amendment No. 178. Perhaps some convicted traffickers would prefer to serve a further term of imprisonment and when they are released, enjoy the proceeds on which the courts have not been able to lay their hands. For example, someone could do another five years and have a nice bounty of just under £1 million to enjoy when he came out of retirement, but according to the clause no further action could be taken. In view of that, and the fact that some people might like to take that option—especially if their initial sentences were not that long—can the Minister give an undertaking that the Government will continue to review the deterrent effect of the clause?

Mr. Mellor: My hon. Friend the Member for Bradford, North (Mr. Lawler) has got it slightly wrong in the sense that the defendant has no option in this matter. If his assets lie within the jurisdiction, they can be seized and he cannot say that he would prefer to do the five years. The five years, and indeed, the maximum of 10 years applies to a situation where the assets are out of the jurisdiction and the defendant needs some incentive to be invited to bring them back within the jurisdiction. I look forward to the time when we are able to have the kind of agreements with other countries for mutual enforcement of court orders. After all, if we can do it in relation to maintenance matters in family cases, we ought to be able to do it in this regard. But until that time, people need an incentive. If the property lies in the jurisdiction, or if it is in the hands of third parties or others within the jurisdiction, the option is not available to the defendant. It will be enforced with the full machinery of the High Court masters and so on.
On that positive note, Mr. Deputy Speaker, I hope that we can let you get back to your Oxo.

Question put and agreed to.

Subsequent Lords amendments agreed to.

STATUTORY INSTRUMENTS &c.

Motion made, and Question put forthwith pursuant to Standing Order No. 79(5) (Standing Committees on Statutory Instruments, &amp;c.)

REHABILITATION OF OFFENDERS

That the draft Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) Order 1986, which was laid before this House on 13th June, be approved.—[Mr. Neubert.]

Question agreed to.

Disasters (Charitable Funds)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]

Mr. Simon Hughes: I am grateful for the opportunity to debate on the Adjournment the subject of Government policy towards support of charitable funds established following disasters. I am particularly grateful for that selection as in one way or another I have sought to have this matter debated since at least the autumn of last year.
I am also grateful that in his place is the Minister for Housing, Urban Affairs and Construction, because the Government know that one of the most recent and important examples of this issue has been manifested in connection with the Abbeystead water pumping station disaster that happened just over two years ago and for which the Minister's predecessor was in some respects the accountable Minister. I also welcome the hon. Member for Lancaster (Mrs. Kellett-Bowman), whose constituency was the most severely affected by that disaster.
When there is a disaster in Britain, or if it affects British citizens, what should the Government do by way of compensating them in an ex gratia way from taxpayers' money from the contingency fund when their only other remedy, if at all, may lie clown a long and tortuous legal road involving much cost, risk and hardship, with no certainty of satisfaction? In that context, there have, tragically, been four recent occasions when this issue has come to the public's attention. I will mention these incidents and then consider in greater detail the particular incident which has caused me to ask when the Government will recognise that it is appropriate, in cases where they have not yet done so, that they, on behalf of the nation, should make a contribution? When will they pay some money to support and compensate the victims, the bereaved or injured, following a disaster?
On 23 May 1984 there was a horrendous methane gas explosion in the valve house of the Abbeystead pumping station in Lancashire, which was opened only four years before. As a result of that explosion, 16 people were killed, three of whom were employees of the North-West water authority, and 28 people were severely injured. Most of the people who were killed or injured came from the village of Saint Michael's on Wyre in Lancashire. They had been visiting the pumping station that evening.
Since then there have been three other occasions when there has been a comparable national tragedy to which the Government have been asked to respond. On I I May 1985 in Bradford there was—as hon. Members will recall—a horrifying fire which enveloped the stadium causing death, destruction and injury. Only a fortnight later in Brussels on 29 May 1985 in the Heysel stadium, on the occasion of the Juventus versus Liverpool football match, there was a savage set of events dramatically witnessed also by people on television from afar, which resulted in death and many injuries.
On the two occasions to which I have just referred, the Government made contributions to the charitable funds that were set up. In Bradford, a sum of £250,000 was paid from the Contingency Reserve Fund. A sum of £230,000 was contributed in response to the Brussels disaster via the Foreign and Commonwealth Office to the victims. It appears that a response was also contemplated on a third

occasion on 27 August 1985 when there was an air disaster at Manchester airport. In the event, that was resolved in a legal manner in a matter of weeks by way of a "mid-Atlantic" settlement and there was therefore no need for a Government response. A substantial sum in the order of millions of pounds was paid in compensation.
However, as of tonight, nearly two years and two months after the Abbeystead disaster, there has been no public recognition on behalf of the nation to compensate those who feel that they have been forgotten. Why have these people been treated differently? What is it about policy that prevents those people from benefiting from a donation from the Government? Will the Government now, by virtue of the Minister's response, consider whether it is possible for these people to receive some compensation?
A charitable fund was set up and £85,000 of public money was raised including a contribution which was received from the North-West water authority. That money has been spent almost entirely on helping with hospital visits and immediate concerns. It has effectively been exhausted and it has not covered any of the legal costs of those seeking legal remedies and has not compensated them for the personal suffering and experience that they have had since then. There has been no Government contribution.
Why has there been no Government contribution? The Government's reason for that—certainly since early last year—is that there is a court case in progress. However, I believe that there is no principle of law or equity which should, as a direct consequence, mean that once a court has begun there can be no Government contribution to these matters. It is wrong in law to say that that is not possible. As I understand both law and practice, any ex gratia contribution, in the hands of the recipient, whether it is later taken into account for other purposes, does not preclude or interfere with the issue of liability, which is the matter being litigated.
When the response to the disaster was made on 24 May 1984, the then Minister of State, Department of Employment, said that an inquiry would commence under the Health and Safety Executive, as indeed it did. He then indicated, as he and his colleagues did by their visits to Lancashire, that the Government would respond in as sympathetic a way as possible. Only a week later, on 30 May, the Minister responsible went to Abbeystead to look at the pumping station, then to a meeting with villagers at St. Michael's on Wyre and then to visit the victims in hospital.
It is true that the verdict of the inquest in October 1984 was accidental death, but in February 1985 the Health and Safety Executive report made it clear that there were severe criticisms of what had happened at Abbeystead and that several factors had contributed to the fatal explosion. The most severe was the design of the ventilation system which, for environmental reasons, had no direct outlet but an outlet back into the valve house. That was, in effect, the cause of the explosion. There were also unauthorised decisions—for example, to leave a valve partly open so that the tunnel was not kept full of water as intended, and not to follow the code of practice in the manual, in any event inadequate, which meant that there had been no inspection of the tunnel at all since it had been built.
The following comment was made at the end of the report on behalf of the Health and Safety Executive:


We have decided not to press charges of criminal negligence against the water authority. It is for the authority to consider the extent of its responsibility morally, humanly and civilly.
Since then, a court action was begun in June 1985 against the water authority, Binnie and Partners the consulting engineers and Edmund Nuttall the civil engineering contractors. In July 1985 a defence was put in. In the same month, the then Minister for Housing and Construction said that the Government could take no further steps. As the Minister knows, I have always accepted that the Government quite properly cannot interfere in the litigation. There have been articles in the New Scientist and the New Statesman and the hon. Member for Lancaster sought to pursue matters in the autumn of 1985. Again, the Leader of the House told her that no steps could be taken. There was then correspondence between my right hon. Friend the leader of the Liberal party and the water authority and between me and the Minister who is replying to today's debate, the Government again saying ultimately that they felt unable to intervene.
I especially ask the Government to reconsider their decision, not only because I believe that the principle is wrong, but in the light of two other factors that make this a special case. First, whatever the exact words used, when in May 1984 the then Minister went on behalf of the Government to meet people in St. Michael's on Wyre, some of whom I have now met, the local people came away with the distinct impression—the words used led them to this conclusion—that they had been assured that the Government would do all that they could. That was a specific and additional commitment.
It is also clear from the Health and Safety Executive report that, although the events did not lead the HSE to the conclusion that it should proceed legally to prosecute, none the less there were things that had gone badly wrong. Even if there were no formal requirement for a response on behalf of the Government, it was implied that somebody should take responsibility for compensating the people concerned. I do not suggest that any particular Minister is responsible—it is a matter for the nation and for the Government of the day — but the Minister charged said that he could give no specific undertaking that the Government would be able to find specific funds, although I believe that it was accepted that funds exist for payment of compensation of this kind if the Government choose to use them.
The people of Abbeystead and St. Michael's on Wyre have come to feel especially aggrieved when they read this year, for example, that £100,000 was paid to a horse injured by the North-Eastern electricity board, while they had still received nothing. They have had no help through legal aid. They are pursuing together their legal remedies. But all the time they are doing without the money that they need to make their lives more tolerable. Many of the people who were bereaved are coping with children and relatives in a difficult position. Many people were very badly injured and were lucky to survive.
I hope the Government will accept that there is an enormous feeling which goes well beyond the village of St. Michael's and across the boundaries of the county of Lancashire that it would be appropriate now for the

Government to consider making a payment on behalf of the nation that in no way would preclude other rights that the individuals might be able to enforce.
I do not wish to end by paying any tribute to individuals who were affected. It would be invidious to name one or some but not others. Many people have, however, sought to take up the case of these tragically affected families and individuals. I pay tribute in general to the members of the press in Lancashire who have campaigned consistently and honourably on behalf of the people in the area that they represent in their profession. The local newspapers—the Lancaster Guardian, the Garstang Courier, the Lancashire Evening Post and the Blackpool Gazette — have done consistently good work in arguing the case.
I want to end with a quote from one of those newspapers because it puts the case far more cogently than perhaps any words from a parliamentarian can do. The editorial in the Lancashire Evening Post of 29 October last year, which was headed:
Time to end this cruel waiting game
said:
The Abbeystead case seems more unfair because there could soon be settlements of both the Manchester air disaster and Bradford football fire claims.
There has been tremendous pressure to settle these because they happened in very public places rather than a waterworks in the middle of nowhere.
But surely the principle is the same. The injuries were the same; the burns the same … the agony is the same. They should all have their compensation without having to engage in legal chess.
I hope that the Government can say that they will respond in a similar way to alleviate the misery of these poor individuals who have suffered enough already.

Mrs. Elaine Kellett-Bowman: I should like to make one or two points as my constituents were so tragically involved. One cannot visit any event in the villages around St. Michael', as I was doing last weekend and shall be doing again this weekend — and as I do most weekends—without seeing people who have been tragically scarred physically by the awful event at Abbeystead at 7.30 pm on the evening of Wednesday 23 May 1984. Indeed, had it not been a Wednesday it is likely that I should have been there myself.
But those physical scars are, if anything, the least important. It is the mental and psychological scars that are harder to bear and to heal, and to see in those one loves, and the loss of loved ones the terrifying memories that do not go away. Those scars cannot begin to heal until the question of compensation for the victims has been settled. It is now over two years since the accident, and the end is not yet in sight.
Eager though my constituents are to have an end to this agonising waiting, they know that they have a just and cast iron case for compensation, and they will pursue it to a successful conclusion. Anything that the Government can do to expedite that successful conclusion would be gratefully welcomed by my constituents.

The Minister for Housing, Urban Affairs and Construction (Mr. John Patten): Mr. Deputy Speaker, it must be a twelve month or more since I stood under your stern eye at the Dispatch Box during an Adjournment debate. I do it tonight for two reasons. The first is to give the Parliamentary Under-Secretary, my hon. Friend the


Member for Ealing, Acton (Sir G. Young), a well-deserved night off from replying to Adjournment debates. In any event, he is so far ahead of the field that his place in the "Guinness Book of Records" as the all-time speaker in Adjournment debates is completely safe and sound. The second reason is that I have taken a particular interest in the tragic event at Abbeystead since it was first drawn to my attention by my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman). It is clear that all of us share a deep concern for the victims of the explosion, and their dependants. They have our deepest sympathy. My hon. Friend the Member for Lancaster has been particularly active in bringing to my attention their problems and in striving to find ways of easing them, and of speeding up the difficult processes that they must go through in pursuit of their claims in the courts of law. She has used her regional contacts with the chairman and chief executive of the water authority with equal vigour to ensure that they do not forget the urgent need for as quick a settlement as possible. She has corresponded with me regularly, as well as with the Lord Chancellor and with some of my other colleagues. This is one of those issues that cuts across Governments and Departments.
My hon. Friend the Member for Lancaster also led a delegation of some of those injured at Abbeystead to see me around last Christmas time. That gave me the opportunity to hear at first hand about their feelings and frustrations, and to see the injuries that they have suffered. Thus, I have a slight knowledge of what they have gone through. But all of us are constrained by the current proceedings in the High court, and none of us can or should seek to do or say anything that might affect their natural outcome.
I turn to the tragic accident. The Abbeystead valve chamber is part of the major water supply project by which water can be transferred by tunnel at times of need from the river Lune to the river Wyre. The works were commissioned in 1980 when the chamber was inspected by the Health and Safety Executive—it is important to put this on the record again—which rated it as a low risk installation. The hon. Member for Southwark and Bermondsey (Mr. Hughes) has already recounted that on the night of 23 May 1984, when 36 local residents from St. Michael's on Wyre were on a visit of inspection, together with eight employees of the North-West water authority, there was an explosion which all but demolished the valve chamber. Sixteen of the 44 persons present lost their lives and all the others were injured, some very seriously. Indeed, I have met one or two of them.
As the hon. Member for Southwark and Bermondsey said, the circumstances of the accident were thoroughly investigated by the Health and Safety Executive, whose report was published in February 1985 after consideration by the Health and Safety Commission. The report concluded that the explosion had been caused by the ignition of a mixture of methane gas and air carried into the valve chamber by the flow of water from the tunnel when the pumps were switched on after a period of inaction during which the tunnel had partly emptied.
In effect, the methane gas had entered the tunnel in solution in water from the surrounding rock and had been released in gaseous form into the air spaces in the tunnel. But I must stress in response to the hon. Member for Southwark and Bermondsey that the executive did not attribute any blame for the accident, although with hindsight — I stress that — it considered that the

explosion could have been avoided. Of course, no criminal proceedings have been instituted or are, I understand, presently being considered.
In June 1985, actions in the civil courts for damages were started by those bereaved or injured by the explosion. There are three separate defendants: the water authority, the consulting engineers who designed the scheme, and the construction company which built it. The water authority, its insurers, solicitors and counsel have, I understand, made every effort to ensure that there has been no delay on their part in this case. I have stressed to the chairman of the water authority that there should be no delay on the part of the water authority. I believe that it has moved as swiftly as may be on all occasions in order to ensure that there has been no delay. I should be surprised and appalled to be told that there was any evidence to the contrary. There is some news, in that I understand that an application will be made by solicitors for the water authority to Mr. Justice Christopher Rose in the High Court on Wednesday 9 July for an order that the case be set down for hearing on Monday 6 October.
For the benefit of my hon. Friend the Member for Lancaster, I repeat that an application will be made by solicitors for the water authority to Mr. Justice Christopher Rose in the High Court on Wednesday 9 July so that the case may be set down for hearing on Monday 6 October 1986. In the circumstances, we can say nothing more about the legal proceedings. Certainly, I could not make any comment as to blame.
Having given that piece of news to the House, I turn to more general principles. I am pleased to note that there has been positive action by neighbours and others in the region to give some solace to those bereaved or injured by the accident by means of contributions to the disaster fund organised by the Lancashire Evening Post immediately after the accident. I understand that the fund collected about £100,000, of which one fifth— £20,000 — was donated by the water authority. About one fifth of the money has come from public funds. I have been advised that all the moneys have been distributed equally to the 44 families affected by the tragedy. That is a small consolation in the circumstances, but it is an indication of the traditional response of the British public in times of tragedy, especially those who live in Lancashire.
The hon. Member for Southwark and Bermondsey, understandably, compared the position of the victims of Abbeystead with that of the victims of the equally tragic Bradford football fire—I visited the scene shortly after the fire, when I was the Parliamentary Under-Secretary of State for Health and Social Security—and the Heysel stadium disaster. The Government made donations to relief funds on both those occasions. It was stressed at the time that the contributions were not just significant but were exceptional.
The Government felt — I know that the hon. Gentleman will not agree—that the tragedies were so exceptional in their public impact as to warrant such an unusual departure from the general rule that the Government do not contribute to relief funds. Generally speaking, Governments of all political colours have followed that course.
It would be painful for me and for those who may read the debate in Hansard to begin to say where scale should be taken into account when we consider the pain suffered by individuals and when we try to make some recompense from public funds. Governments would always be in a


difficult position if they were faced with demands for compensation on every occasion a disaster occurred, however few people were affected. Where does one draw the line? The hon. Gentleman is well known in the House for being fair-minded in his approach to issues. It is a question which I cannot answer. All I know is that one could turn to an individual person harmed in a disaster. The position of that one person is just as bad as the terrible deaths of the 16 people in Abbeystead, and the pain caused to their relatives as well as those involved in the Bradford fire and the Heysel stadium disaster.
I do not think that it would be appropriate for the Government to make donations at taxpayers' expense to the legal costs of a plaintiff pursuing an action for damages in the courts. A plaintiff would not commence proceedings in the courts unless he had been professionally advised that there was a reasonable chance of success. For such a plaintiff, the net result of any successful action would be the damages which he secures, less the legal fees that he has had to pay, assuming that they are not recovered in whole or part from his opponent. The legal aid scheme is to assist the plaintiff of more modest means. If such a plaintiff recovers any money or property as a result of legally aided proceedings, the legal aid fund will be recouped from his winnings to that extent.
Where one of a number of plaintiffs is legally aided and wishes to bring a test case—this is important in the context of those who suffered so much in these sad circumstances—contributions can be obtained under the scheme for all the interested joint plaintiffs. All those interested joint plaintiffs can obtain legal aid under the scheme. That may have a considerable bearing in this case.
The debate highlights the difficulties — I would be foolish to try to hide them—of any Government who seek to meet the public response to disasters which are brought before us on our television screens or in our newspapers, regionally and nationally. It highlights the difficulties of deciding where and when Government could and should contribute to a disaster fund. It highlights how important it is for those people who have been or who feel that they have been harmed to pursue their cases as vigorously as possible, helped by all the normal means available. It is important to everyone involved in cases such as this—I speak generally, not about Abbeystead itself—that we ensure that those cases are expedited.
I thank the hon. Member for Southwark and Bermondsey for raising this matter. I thank also my hon. Friend the Member for Lancaster for her presence and her unstinting efforts on her constituents' behalf in their present difficult position.

Question put and agreed to.

Adjourned accordingly at fourteen minutes to One o'clock.